At last week’s Realtors 2013 Midyear Legislative Meetings & Trade Expo, congressional representative Randy Neugebaur (R-TX) revealed that Congress could start rolling out housing reform legislation as early as next month. He hinted that “government-sponsored enterprises Fannie Mae and Freddie Mac…need to be dialed back because taxpayer dollars are guaranteeing nine out of 10 mortgages” and said he hoped that the reform would help “bring private capital back into the housing market.” Other analysts and politicians also warned that housing reform might also entail eliminating some of the tax benefits of homeownership, and encouraged National Association of Realtors (NAR) members to work hard to keep housing “first on the nation’s public policy agenda” in order to protect those tax benefits.
Although Neugebaur seemed optimistic about housing reform, others in the industry fear that recent profits from Fannie and Freddie could actually delay housing reform. The Hill’s Vicki Needham warned that “any efforts to reduce Fannie and Freddie’s involvement in guaranteeing the bulk of home loans…could be undermined by the perception that the agencies have recovered financially”. Since the issue is a controversial topic and many legislators would like to steer clear of appearing to be involved in changes that could diminish homeownership or reduce tax benefits associated with homeownership, it seems likely that many would happily pronounce the recent GSE profits as evidence sufficient to leave reform to another day.
by Carole VanSickle