As the upcoming presidential election is a burning issue in our everyday lives, I can’t avoid touching it in my blog as well. The loudest issues we hear about are immigration, healthcare and taxes. But there are many other important points that may not be so visible, and that will considerably affect our life, and often also our work.
Mortgage and housing policies are one of the areas where the candidate’s (or better to say their parties’) opinions differ, although the amount of information we are given by both sides is very modest. Based on this thorough article by Eric Klopfer, I’m bringing you excerpts on what Trump’s platform in Cleveland and Clinton’s platform in Philadelphia had to say to the issues of housing and housing finance reform.
In the “Responsible Homeownership and Rental Opportunities” section of the republican platform, we can read about the party’s emphasis on homeownership, stronger communities and individual liberties. They criticise the current regulatory state of affairs, especially the “paralysing monopoly” of Fannie Mae and Freddie Mac, the controversial insurance giants who have been sitting on the housing market for decades. To quote from Erik’s article:
- The concept of “responsible homeownership” seems consistent with much of the Dodd-Frank Act efforts to create prudent standards for mortgage underwriting, but Republican antipathy to Dodd-Frank has led to an alternative approach centered around lender-initiated efforts and borrower behavior, rather than what the Consumer Financial Protection Bureau (CFPB) dictates.
- The platform acknowledges supply-side constraints as well, and includes recommendations to reduce restrictions that limit the ability of new construction to keep up with demand.
- The platform expresses frustration with the lengthy conservatorship of Fannie Mae and Freddie Mac, but encourages the examination of their roles, marking a change from prior Republican calls to wind down the entities.
- The platform criticizes the Federal Housing Administration (FHA) for operating outside of its mission footprint and losing money, and recommends income limits on FHA activities.
- Finally, the platform mentions (but does not discuss) renting, within the context of eliminating restrictions to promote greater supply of rental opportunities.
Their platform covers much less of the topic, so we are only given the following two general stances:
Again quoting the article:
- The platform defends the post-crisis policy framework created by Dodd-Frank, and commits to resisting any rollback of related legislative or regulatory provisions.
- The platform acknowledges the continuing struggles of homeowners and renters harmed by the housing bust, and commits to expanding access to affordable housing and homeownership.
That doesn’t really tell us much. More than radical changes, the Democrats are leaning towards maintaining the CFPB’s position on the housing market, together with stabilizing and possibly improving the current status of the FHA program.
Stays with a question mark. Aside from the above general points, there’s still much left to be said by both Clinton and Trump regarding the housing and mortgage industry. We are still mostly being left in the dark as we enter the proper debating season heading into the election, and surveys show that people are not liking that one bit. In one recent survey, 36% of respondents expressed their concern about both of the presidential candidates doing a poor job of specifying their policies on housing and the relative financial matters, and 35% said it’s a relevant topic to them and would like to get more information from both Clinton and Trump. In another survey executed by Make Room (a non-profit organization focused on affordable housing), 76% of voters said they are more likely to support candidates who make housing affordability a focus of their campaign.
Bottom line: people have strong opinions about both candidates, but there are lots of issues that still need to be addressed. It will be good to get some additional clarity around all of these housing issues in the coming months running up to the election.