“The White Paper” Reforming America’s Housing Finance Market – A report to Congress. http://www.treasury.gov/initiatives/Documents/Reforming%20America%27s%20Housing%20Finance%20Market.pdf
This is a 31 page document from The Department of the Treasury and HUD that was given to Congress in February. I have included the link above if you want to take the time to read it. If you don’t, the basics are:
- Over the next few years Freddie and Fannie will play a reduced role in the Nation’s housing market with the majority of the effect being felt in 5 to 7 years.
- Fannie, Freddie and HUD will continue to play a role in providing financing to low-to-moderate income borrowers. FHA will return to its traditional role as a targeted lender of affordable mortgages.
- Freddie and FNMA must shrink their portfolio by at least 10% a year.
- Pricing on loans will need to be increased to cover the true cost of lending and to entice private capital.
- Government will play a stronger regulatory role as private investment enters the market.
- Servicing – Fees and regulatory oversight. National standards, improving 1st and 2nd mortgage conflicts.
- Federal Home Loan Bank will continue to support small to medium sized banks.
- Restoring Trust and Integrity. Curbing abusive practices, promoting choice and clarity, stronger underwriting standards.
- Risk Retention.