Month: February 2016

Democratic Presidential Candidates on Housing Policy


On January 16, 2016, the Congressional Black Caucus Institute hosted representatives of the three Democratic Presidential candidates at a forum on homeownership and housing policy.  The forum was moderated by Teresa Bryce Bazemore, President of Radian Guaranty Inc, a leading private mortgage insurance company.

On policies that promote broad and wide access to homeownership…

Secretary Clinton: Housing is the largest source of wealth creation that we have as a nation, and unfortunately African Americans, for far too long, haven’t been able to leverage that source of wealth building, and because of the great recession, it’s only gotten worse.  We understand that the door to homeownership has been shut for far too long for families ready to go into homeownership, and she’s [Secretary Clinton] going to do whatever it is that needs to be done to support policies that make sure that we have access to sustainable homeownership.

Senator Sanders: At the core of Senator Sanders’ campaign is the commitment to reverse the obscene level of income and wealth inequality that often keeps African Americans from purchasing homes coupled with the lack of economic opportunities.  Senator Sanders will absolutely and resolutely focus on implementing housing and homeownership policies that target those who have been shut out of the system for far too long.

Governor O’Malley: Governor O’Malley has actually called for doubling the low income housing tax credit as well as beyond looking at specific tools we have such as that, but also looking at the fundamentals of how are we building our communities.

On preserving the 30 year fixed rate mortgage and some form of government guarantee…

Secretary Clinton: Secretary Clinton absolutely supports making sure that the 30 year loan – the 30 year mortgage – remains in place, and that the government supports it.

Senator Sanders: Senator Sanders does support the 30 year fixed rate mortgage, and this is why it’s critical that we preserve the federal role in the secondary mortgage market.  If we get rid of Fannie Mae and Freddie Mac as many Republicans have suggested, we can kiss the 30 year fixed mortgage rate goodbye.

Governor O’Malley: Absolutely that he supports the 30 year fixed rate mortgage.  I can’t imagine why or how ridiculous we’d have to be to go away from a 30 year fixed rate mortgage.

On supporting safe, sustainable, low down payment mortgage financing for creditworthy borrowers…

Secretary Clinton: This is really about access to credit…making sure that folks coming up, getting out off college with a bunch of debt can have access to the credit that they need to be able to buy a home, again understanding that it’s a wealth building tool.  While you may have more equity if you were to put down a larger down payment, it shouldn’t be a requirement.

Senator Sanders: It is about being able to have access to credit so that you can purchase that home.  So Senator Sanders would definitely support having a low down payment.

Governor O’Malley: Of course Governor O’Malley supports the low down payment, because how else are we even going to move houses, create jobs from the housing market unless we have low down payments.  It doesn’t add up with the demographics and the incomes of where America is nowadays.

On targeting FHA resources to those who really need them (earning median or below wages or purchasing homes in the median home price or below)…

Secretary Clinton: We believe that there needs to be a balance.  By statute, a majority of the FHA portfolio had to pay for itself in premiums collected over the life of a loan.  But at the same time a critical function of FHA is to provide loans for homeownership opportunities for low and moderate income families.  I think that it’s a balance, and that’s the way we approach it.

Senator Sanders: This question goes to the heart of Senator Sanders’ candidacy for president.  His view of government is that generally that wealthy people do just fine without government assistance, but it is that bottom half that do benefit from having that aid and that support from the government.

Governor O’Malley: It’s making sure that every community has flexible needs.  What might work in South Carolina might not work in Maryland, and what works in Maryland might not be the same in California or the Midwest.  If the government is not there and is not driving the train here, then we know how it goes off the track, and that is where I think Governor O’Malley is absolutely trying to – will do whatever he can to make sure that more money, more assistance and more opportunity is going to hit the ground.

On the GSEs passing along cost savings to borrowers since they are reducing their risk through credit risk transfers…

Secretary Clinton: If private capital is willing to assume the mortgage credit risk at a lower rate than GSE’s are currently, then yes.  It’s seems reasonable that the savings should be substantially passed along to the borrowers.

Senator Sanders: Many in the housing industry argue that the GSE’s continue to charge fees in excess of what is required.  The result is that mortgages are out of reach that would otherwise be within the grasp of the borrower if priced appropriately.  So, I think that the GSE’s should, like, let the borrower see some of the benefit.

Governor O’Malley: I believe Governor O’Malley would agree, but probably would look at this with a jaundice eye and also be very careful in terms of what we know we can trust- hopefully with Fannie and Freddie- versus what we’ve been burned time and time again with the private sector.

On preserving the consumer protections created by Dodd-Frank…

Secretary Clinton: This is a simple question for Hillary.  Her position is she’d veto any legislation that attempts to weaken the law and would fully enforce its protection.

Senator Sanders: Senator Sanders strongly opposes undermining Dodd-Frank.  He believes that it’s a modest piece of legislation that we should take even further.

Governor O’Malley: Governor O’Malley veto anything that would try to take away Dodd-Frank.

On a specific plan…

Secretary Clinton: I think, to be very specific, expanding access to credit.  Hillary believes that in order to make sure that young people can be able to buy homes, in order to make sure that folks have the capital that they need to be able to be homeowners, [you] have to expand access to credit in a safe and responsible way.

Senator Sanders: [We focus on] Expanding access to credit as well as protecting the 30 year fixed mortgage rate so that we don’t exclude communities of color.

Governor O’Malley: Governor O’Malley’s proposal to double the low income tax credit is a very specific proposal.  It would do exactly what we would hope the goals would do to create more housing, more housing opportunity and jobs.