MATH Briefing - 3rd Quarter 2015: Incremental Steps for a Safer Housing Finance System
DescriptionSeven years after the collapse of the housing finance system, the conservatorships of Fannie Mae and Freddie Mac remain unreformed. Today, the companies’ outstanding guarantees, backed by taxpayers, are actually higher than when the conservatorships were established. Over the past several years, however, bipartisan consensus has emerged on some of the basic constructs for housing finance in a post-conservatorship world. Acting now in just a few areas will ensure meaningful progress in building a safer housing finance system.
This briefing will address the technical aspects of these incremental steps, which would reduce taxpayer exposure, draw private capital in to help restore market functioning and lay the groundwork for broader housing reform. These steps include expanding the volume and depth of credit risk transfer transactions; refocusing the common securitization platform so it applies to the whole market, not just Fannie and Freddie; and freezing the conforming loan limit to constrain the taxpayer footprint at the high end of the mortgage market.
Ed DeMarco is a senior fellow in residence at the Milken Institute Center for Financial Markets and former acting director of the Federal Housing Finance Agency. The FHFA, which DeMarco ran from September 2009 to January 2014, is the conservator for Fannie Mae and Freddie Mac and regulator of those companies and the federal home loan banks. Prior to becoming acting director, DeMarco was chief operating officer and senior deputy director of the FHFA and its predecessor agency. Earlier, he was assistant deputy commissioner for policy at the Social Security Administration. Before joining SSA, DeMarco was director of the Office of Financial Institutions Policy at the Department of the Treasury, where he oversaw analyses of policy issues involving banks, government-sponsored enterprises and other financial institutions. DeMarco received a B.A. in economics from the University of Notre Dame and a Ph.D. in economics from the University of Maryland.
Phillip Swagel is a professor at the School of Public Policy of the University of Maryland and a senior fellow at the Milken Institute. Swagel was assistant secretary for economic policy at the Treasury Department from December 2006 to January 2009. In that position, he served as a member of the TARP investment committee and advised Treasury Secretary Henry Paulson on all aspects of economic policy. Swagel previously worked at the White House Council of Economic Advisers, the International Monetary Fund and the Federal Reserve, and taught economics at Northwestern University, the University of Chicago Booth School of Business and the McDonough School of Business at Georgetown University. He received a bachelor's degree in economics from Princeton University and a Ph.D. in economics from Harvard University.
Nick Timiraos is a national economics correspondent for the Wall Street Journal in Washington, D.C. He has covered the housing bust and the government's response to the mortgage crisis, including the bailout of finance giants Fannie Mae and Freddie Mac. In 2008, he contributed to the Journal's coverage of the presidential election. He joined the Journal in 2006. Timiraos graduated from Georgetown University, where he studied government and American studies.
For additional information, please contact Dianna Dunne, Director of Government Affairs, at email@example.com.