Home Builders President on Fannie and Freddie Restructuring in 2004

September 17, 2008

From a letter to the editor in USA Today on March 5, 2004 after Greenspan testified before Congress on why Freddie Mac and Fannie Mae need more oversight (the first sentence is priceless):

Fed’s idea would hurt potential home buyer

If Congress follows Federal Reserve Chairman Alan Greenspan’s advice to rein in Fannie Mae and Freddie Mac because they could conceivably one day pose a “systemic risk” to the nation’s financial system, home buyers had better be ready for a far-less-accommodating home-finance system than the one they have grown accustomed to in recent years (“Greenspan says Freddie, Fannie need oversight,” Money, Feb. 25).

Acknowledging that Fannie Mae and Freddie Mac are first-class financial institutions that “have managed their risks well” and that there is “nothing on the immediate horizon” expected to compromise their good health, Greenspan, nevertheless, wants to limit their portfolio growth, even if it means that such mainstays of the mortgage market as fixed-rate mortgages could be headed the way of the dinosaur.

Applying harsh constraints on the ability of the two government-sponsored enterprises (GSEs) to issue debt and invest in mortgage assets would hit millions of working American families in the pocketbook by reducing the availability of home-financing opportunities and driving up mortgage interest rates.

As Congress moves to enact meaningful regulatory restructuring of the GSEs that ensures their continued financial health, it must protect their ability to follow their federal charter of making homeownership more affordable and available to America’s families. This effort must remain squarely focused on Fannie Mae and Freddie Mac and not, despite Greenspan’s suggestion, be allowed to turn into a referendum on the best housing-finance system in the world.

Jerry Howard
Executive vice president and CEO
National Association of Home Builders
Washington

Then there was this from the same association back in 2002 in a New York Times letter to the editor:

Housing Opportunities

That lenders are saving loans through payment rescheduling and other means (front page, May 4) demonstrates how far the housing finance system has moved. Fannie Maeand Freddie Mac have brought in the capital needed to create housing opportunities for a growing and diverse population.

Without them, it is questionable whether we would be emerging from a short recession, which was blunted by a buoyant housing industry.

Fannie Mae’s and Freddie Mac’s leadership is an achievement. So it is disturbing to see them under continued attack by those who oppose federal policies to improve housing opportunities. One can only question the ideologies that would tie the hands of a system on course to revitalize how we finance our homes and neighborhoods.

GARY GARCZYNSKI
President,
National Association of Home Builders
Washington, May 7, 2002

Of course. Any policy that could reduce the number of homeowners in America is bad public policy. Ask the home builders and realtors. They’ll give you an unbiased opinion: homeowner = good; renter = bad.

If anything comes out of this financial/housing crisis as it relates to the future of tax reform and housing policy, it should be that what comes out of the mouths of paid shills from the the National Association of Home Builders and the National Association of Realtors should be taken with a huge grain of salt.

Gotta go. There’s a realtor on the phone telling me that “markets are favorable” and now is definitely the time to buy.


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