The housing sector is one of the pillars of the U.S. economy. That’s why we have marveled at the many partisan and radical proposals to reform the federal housing finance system that would have trashed both what’s good and what’s bad with the current system. PPI continues to maintain that any reform proposal must stabilize U.S. housing markets, reduce the government’s over-sized footprint in housing finance and protect taxpayers from a repeat of the housing bailout.
While the full details aren’t yet available, a bipartisan proposal from Senators Tim Johnson (D-South Dakota) and John Crapo (R-Idaho) seems to move the housing debate out of the ideological realm and closer to reality. Their blueprint ensures the continued availability to homebuyers of long-term, fixed-rate mortgages, and proposes creation of a fee-based insurance fund, similar to the Federal Deposit Insurance, to shield taxpayers from having to bailout the housing finance sector in the future.
There are still many details in question, but we think Senators Johnson and Crapo have pointed the housing debate in a more promising direction.