The Cascade Team Blog

        “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:

1. 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. 
2. 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.
3. Freddie and FNMA must shrink their portfolio by at least 10% a year.
4. Pricing on loans will need to be increased to cover the true cost of lending and to entice private capital.
5. Government will play a stronger regulatory role as private investment enters the market.
6. Servicing – Fees and regulatory oversight.  National standards, improving 1^st and 2^nd mortgage conflicts.
7. Federal Home Loan Bank will continue to support small to medium sized banks.
8. Restoring Trust and Integrity.  Curbing abusive practices, promoting choice and clarity, stronger underwriting standards.
9. Risk Retention.