Failure to Recover: The State of Housing Markets, Mortgage Servicing Practices, and Foreclosures
Statement before the Committee on Oversight and Government Reform

 

Here are four steps that could be taken today to help promote a housing recovery.  Failure to Recover: The State of Housing Markets, Mortgage Servicing Practices, and Foreclosures

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1.      End the needless delays in foreclosures that are slowing a recovery and driving up the cost of taxpayer bailouts of the GSEs.  

2.      Repeal the two biggest job killers – ObamaCare and Dodd-Frank – and act on dozens of other sound ideas have been suggested, but ignored.

3.      Promote the conversion to rental of properties resulting from short sales, REOs and foreclosures by expanding the GSEs’ individual investor loan limit.

4.      Help underwater borrowers who have done the right thing and made loan payments for the last 5-plus years get the benefit of a lower rate but have them keep the same monthly payment.  This way the loan would amortize much faster, helping the homeowner get himself out from underwater.  This would replace a reliance on refinances as an extremely weak for of stimulus.

 

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About the Author

 

Edward J.
Pinto
  • American Enterprise Institute (AEI) resident fellow Edward J. Pinto is the codirector of AEI’s International Center on Housing Risk. He is currently researching policy options for rebuilding the US housing finance sector and specializes in the effect of government housing policies on mortgages, foreclosures, and on the availability of affordable housing for working-class families. Pinto writes AEI’s monthly Housing Risk Watch, which has replaced AEI’s FHA Watch. Along with AEI resident scholar Stephen Oliner, Pinto is the creator and developer of the AEI Pinto-Oliner Mortgage Risk, Collateral Risk, and Capital Adequacy Indexes.


    An executive vice president and chief credit officer for Fannie Mae until the late 1980s, Pinto has done groundbreaking research on the role of federal housing policy in the 2008 mortgage and financial crisis. Pinto’s work on the Government Mortgage Complex includes seminal research papers submitted to the Financial Crisis Inquiry Commission: “Government Housing Policies in the Lead-up to the Financial Crisis” and “Triggers of the Financial Crisis.” In December 2012, he completed a study of 2.4 million Federal Housing Administration (FHA)–insured loans and found that FHA policies have resulted in a high proportion of working-class families losing their homes.

    Pinto has a J.D. from Indiana University Maurer School of Law and a B.A. from the University of Illinois at Urbana-Champaign.

  • Phone: 240-423-2848
    Email: edward.pinto@aei.org
  • Assistant Info

    Name: Emily Rapp
    Phone: 202-419-5212
    Email: emily.rapp@aei.org

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