Market Stability

The collapse in the housing and financial markets in 2008, sparked one of the greatest economic recessions in American history. According to the Government Accountability Office (GAO), the 2008 financial crisis cost the U.S. economy over $22 trillion – $13 trillion in lost economic output and $9.1 trillion in home equity. More than 7 million Americans lost their homes during the recession. Triggered by misguided government intervention, particularly in the subprime mortgage market, the housing market is slowly making a comeback, but continued government intervention is setting the stage for another collapse.

The same government interventions that caused this economic collapse remain. Government-sponsored enterprises, “affordable” housing efforts, and manipulation of interest rates from the Federal Reserve threaten to undermine market stability, the financial well-being of American homeowners, and the real estate community at large.

Reversing our current trajectory requires learning from past mistakes. Getting the federal government out of the housing market altogether will rid the market of distortion, prevent another housing bubble, and empower first-time home buyers and low-income earners to afford a home that’s right for them.

Briefs

Repealing the Federal Housing Administration (FHA)

Background: The Federal Housing Administration (FHA) is a federal agency created back during the Great Depression as part of the National Housing Act of 1934.…

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Promoting Stability in Housing Markets: Ending Fannie & Freddie

Background: The Federal National Mortgage Association, known as Fannie Mae, and the Federal Home Loan Mortgage Corporation, known as Freddie Mac, are government-sponsored enterprises (GSEs)…

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Blog posts

President Trump Should Push the Senate on GSE Reform

By Norbert Michel, Heritage Foundation Financial Regulations Expert The House Financial Services Committee has just passed a major financial regulatory reform bill, the Financial CHOICE Act. …

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Why Shoring Up Fannie and Freddie Would Hurt the Housing Market

By John Ligon, Senior Policy Analyst and Research Manager Almost a decade removed from the last housing crisis, the economy and housing market have improved—yet the…

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Real Estate Professional Legislative Strategy Call 04/05/17

Yesterday conservatives working in the real estate industry all came together for our monthly Legislative Strategy Call. During the call we heard from John Ligon - Heritage Foundation…

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It’s Time to Denationalize the US Reverse Mortgage Market

By John Ligon, Senior Policy Analyst and Research Manager Since 1989, when the Department of Housing and Urban Development started to pilot home equity conversion mortgages…

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This Harmful Housing Rule Deserves to Be Overturned by Congress

By Norbert Michel, Research Fellow in Financial Regulations and John Ligon, Senior Policy Analyst and Research Manager In the last few months of the Obama administration, the…

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It’s Time For The Fed To Shrink Its Balance Sheet

By Norbert Michel, Heritage Foundation Financial Regulations Expert A new debate is heating up over whether the Federal Reserve should continue holding on to all…

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Senate Confirms Retired Neurosurgeon Ben Carson as Secretary of Housing and Urban Development

By Rachel del Guidice, Daily Signal Reporter The Senate confirmed retired neurosurgeon Ben Carson as the new secretary of the Department of Housing and Urban Development…

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Another Reason to Dump Fannie Mae

Earlier this year Fannie Mae took an unprecedented step in its involvement in the housing market through a $1 billion dollar deal with Invitation Homes,…

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Kashkari Highlights Too Big To Fail Reform

By Norbert Michel, Heritage Foundation Financial Regulations Expert It’s always good when a Federal Reserve Bank president talks about ending bailouts for large financial companies. …

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Real Estate Professional Legislative Strategy Call 02/08/17

Yesterday, conservatives working in the real estate industry all came together for a our monthly Legislative Strategy Call. During the call we discussed CFPB abuse of auto-lenders,…

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Fannie Mae Spends $24 Million On New Office Space

Last week, Senator Chuck Grassley sent a letter to the Federal Housing Finance Agency (FHFA) asking them for a review of excessive spending by Fannie Mae on…

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Restore Housing Decisions to Local Communities

As cabinet appointees are confirmed and begin their new roles, the Trump administration has ample opportunity to reduce the size and scope of government regulation…

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5 things Ben Carson should do in his First 100 days as HUD Secretary

What can Dr. Carson accomplish in his first 100 days?…

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Trump Blocks Last Minute Obama FHA Action 

On the way out the door, the Obama administration announced that the Federal Housing Authority (FHA) would cut the rate borrowers get on their mortgage…

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Obama Told Us ‘Elections Have Consequences.’ Here’s One Way to Reverse His Liberal Legacy.

By Senator Mike Lee (R-UT) “Elections have consequences, and at the end of the day, I won.” These were the infamous words President Barack Obama…

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FHFA Issues Final Rule Expanding Fannie and Freddie’s Role in Underserved Markets

The Federal Housing Finance Agency (FHFA) issued a final rule on Tuesday creating a “duty to serve” for Fannie Mae and Freddie Mac to serve…

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Federal Financial Policies Collide and Consumers Lose

By Norbert Michel, Heritage Foundation Financial Regulations Expert For decades, the federal government has become increasingly involved in education and home mortgages—a phenomenon driven by…

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Government Intervention in Housing Has Always Been Bad. Here’s Why Today Is No Different.

By Claudia Sladick & Norbert Michel, the Heritage Foundation Ever since the federal government embedded itself into the U.S. housing market, it has caused problems…

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Housing Finance Policy Looms as the Elephant in the President Trump’s Oval Office

By Norbert Michel, Heritage Foundation Financial Regulations Expert Washington liberals have tried to convince the public that the housing finance policies started by the Clinton…

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Why Mortgage Principal Forgiveness Policy Is a Bad Idea

By John Ligon, Heritage Foundation Policy Analyst There’s nothing like a “good crisis” to give the federal government an opening to spread its tentacles further…

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Down Payments 50 Percent Lower Today than in 1989

According to an annual survey conducted by the National Association of Realtors (NAR), 88 percent of recent home buyers financed their home. Of this group,…

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6 Million Americans have Underwater Mortgage

Guest Blog: Gloria Taylor A recent CNBC report notes that nearly 6 million Americans owe more on their mortgages than their home is actually worth.…

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Fannie and Freddie May Need Another Taxpayer Bailout

According to the latest Fannie Mae and Freddie Mac stress test, these Government Sponsored Enterprise (GSE) giants could need a taxpayer bailout of as much…

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Why mortgage principal forgiveness policy is a bad idea

By John L. Ligon, Heritage Foundation Senior Policy Analyst There’s nothing like a “good crisis” to give the federal government an opening to spread its…

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Fannie Mae Expands Low-Down-Payment Program

Fannie Mae recently made changes to their low-down-payment program in order to make it even easier to get a 3% down mortgage. The program, called…

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FHA will now Insure PACE Loans

Last Tuesday, the U.S. Department of Housing and Urban Development (HUD) announced that the Federal Housing Administration (FHA) will now insure mortgages on certain properties…

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Senators Push Back Against FHFA Efforts to Release Fannie and Freddie from Conservatorship

A bipartisan group of Senators recently sent a letter urging Federal Housing Finance Agency (FHFA) Director Mel Watt to wait on “comprehensive reform” from Congress…

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FHA Announces New Changes to Troubled-Loan Program

Last week, under direction from the Obama administration, the Federal Housing Administration (FHA) will now force investors to prioritize reducing the principal amount borrowers owe…

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Understanding GSEs and the 30-year Fixed Rate Mortgage

Fannie Mae and Freddie Mac helped contribute to an unsustainable increase in homeownership in the 2000s that led to the housing bubble and its subsequent…

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Real Estate Industry Groups Call on Congress to Enact GSE Reform

Last week, a coalition of real estate related groups including the American Bankers Association, the Mortgage Bankers Association, the National Association of Home Builders, the…

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How the FHA and NAR Work Together to Hurt the Little Guy

According to the National Association of Realtors (NAR), pending home sales have reached their highest level in over ten years. At the same time, the…

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Average Size of Purchase Loan Application at Record High

According to the Mortgage Bankers Association (MBA), the increase in average loan sizes for purchased mortgage applications is outpacing the recovery in housing prices. The…

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FHA Attempts to Help Borrowers with High Student Loan Debt, but it May Come at a Cost

At a recent 2016 Realtors Legislative Meetings & Trade Expo conference, U.S. Department of Housing and Urban Development Secretary Julian Castro announced changes to the…

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New HUD Guidelines Prevent Landlords from Denying Tenants with Criminal Background History

Last month, President Obama’s Department of Housing and Urban Development (HUD) reinterpreted the Fair Housing Act of 1968 to prevent landlords from using criminal history…

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Homeownership Rate Falls Again

According to the Commerce Department, the U.S. homeownership rate fell a seasonally adjusted 63.6% in the first quarter of 2016, the third lowest figure recorded…

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Energy Policy Modernization Act Amendment Weakens FHA Underwriting Standards

Last month, the Senate passed the Energy Policy Modernization Act of 2015 (S. 2012) by a vote of 85-12. While there were many reasons to…

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Existing Home Sales Tumble, Signs Point to Drop in Housing Demand

Existing home sales nationwide dropped by 7.1 percent from January to February as total units sold went from 5.47 million units to 5.08 million. The…

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Housing prices increase despite lack of demand

Home prices continued to climb in the final three months of 2015 despite cooling demand and declining home sales, according to the most recent quarterly…

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Reasons to be concerned with unanimously passed Condo Bill

In early February, the House of Representatives passed H.R. 3700, “Housing Opportunities through Modernization Act.” Proponents of the bill claim that it “updates” and “streamlines”…

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