Say no to Johnson-Crapo housing reform

This special-interest piece of legislation makes big banks more powerful and winds-down Fannie Mae and Freddie Mac.

Fannie Mae was created 80 years ago after the Great Depression. Its purpose was to free up capital for affordable mortgages, thereby enabling citizens to live the American Dream of home ownership. Fannie Mae and her younger cousin Freddie Mac are GSEs, government sponsored entities. They are publicly traded, privately owned corporations that work closely with the government to support the housing market (20 percent of the U.S. economy).

In 2008, the GSEs were put into conservatorship and received $187 billion in taxpayer dollars. This enabled the GSEs to provide liquidity to the housing market and prevent the Great Recession from becoming another Great Depression. The GSEs have paid the taxpayers back with interest, $203 billion, and Fannie Mae is still the leading provider of liquidity in the housing market. It has funded over $4 trillion in loans since 2009.

The GSEs made it possible for over a million Americans to refinance to avoid foreclosure. They have helped millions more obtain affordable, 30-year, fixed-rate mortgages. This drives the housing market and powers our economy.

It’s time to end the conservatorship and allow Fannie and Freddie to keep their profits, which are currently being confiscated by the Treasury (a subject of more than a dozen lawsuits against this blatantly unconstitutional government overreach). This will allow the GSEs to recapitalize, a key factor in stabilizing the mortgage industry. It would be a huge mistake to eliminate the GSEs and hand their business to the “too-big-to-fail” banks that caused the great recession.

Urge your senators to say no to Johnson-Crapo Housing Reform. This ill-advised piece of legislation purports to protect the taxpayer but is just payback to big-bank donors at the expense of main-street Americans.

Link Neimark, Whitefish