2014: Maxine Waters proposed legislation that would “End Fan and Fred”

Ranking Member of the House Financial Services Committee Maxine Waters proposed legislation that would “end Fannie and Freddie” last year.  Rep. Waters is the Ranking Member of the Finance Committee again in 2015.

Ranking Member Waters needs to abandon her efforts to “end Fannie and Freddie.”

Maxine Waters can be contacted here:


Los Angeles
Congresswoman Maxine Waters
10124 S. Broadway, Suite 1
Los Angeles, CA 90003
Phone: (323) 757-8900
Fax: (323) 757-9506

Washington, DC
Congresswoman Maxine Waters
2221 Rayburn House Office Building
Washington, DC 20515
Phone: (202) 225-2201
Fax: (202) 225-7854

Waters Unveils Housing Finance Reform Legislation

Washington, D.C., Mar 27, 2014


Today, Congresswoman Maxine Waters, Ranking Member of the Financial Services Committee, released a comprehensive legislative proposal to reform the housing finance market. Known as the Housing Opportunities Move the Economy (HOME) Forward Act of 2014, the legislation ends Fannie Mae and Freddie Mac, and creates a new, cooperative-owned securities issuer.

For months, Waters has been working with her Committee colleagues, outside stakeholders, and consumer and affordable housing advocates to craft a measure that ends the incentives created by the ownership structure of the government-sponsored enterprises’ (GSEs) while preserving the role of small financial institutions, providing a more flexible approach to placing credit risk in the markets, and ensuring access to affordable rental housing for low-income families.

“Reforming a 10 trillion dollar housing finance market is an immense undertaking that must be carefully considered,” said Congresswoman Waters. “Fannie Mae and Freddie Mac’s return to profitability and repayment of taxpayer dollars has led some to rightly speculate whether the enterprises need any reform at all. I believe that we have an opportunity to address some of the fundamental flaws of the current system, by ending the perverse incentives created by Fannie Mae and Freddie Mac’s ownership structure and providing an explicit government guarantee that is paid for by industry.”

The draft bill furthers a conversation started by legislation released by Senators Bob Corker (R-TN) and Mark Warner (D-VA) and, more recently, Senators Tim Johnson (D-SD) and Mike Crapo

The foundation of the HOME Forward Act is a number of principles for housing finance reform, released by Committee Democrats in 2013. They include maintaining the 30-year fixed rate mortgage, protecting taxpayers, ensuring transparency, stability and liquidity within a new market, and preventing disruptions to the U.S. housing market during a transition to a new finance system. In addition, the legislation will maintain access for all qualified borrowers that can sustain homeownership and ensure continued affordable rental housing.

The HOME Forward Act establishes a new, lender-owned Mortgage Securities Cooperative that will be the single issuer of government-guaranteed securities and will be governed on a one-member, one-vote basis. The Act creates an explicit government guarantee, paid for by industry and used to capitalize a catastrophic insurance fund. It improves upon bipartisan proposals in the Senate by, for example, providing for credit risk sharing on a more flexible basis. Small financial institutions will have direct access to a “cash window” in order to preserve their access to the secondary market. And the legislation recognizes the important role of the National Affordable Housing Trust and Capital Magnet Funds, and fulsomely addresses the multi-family market.

The HOME Forward Act would empower the government to provide for liquidity in the secondary mortgage market and ensure access to sustainable homeownership for creditworthy borrowers of all backgrounds and in all regions of the country. At the same time, it would appropriately price for risk, protect taxpayers and level the playing field for large and small banks.

Waters added, “I am hopeful that this legislation will continue to move the conversation on housing finance reform forward. While there are differences, this legislation and the two bipartisan proposals in the Senate embrace a number of common themes. These include preserving the 30-year, fixed rate mortgage, protecting taxpayers from the costs of a housing downturn by establishing a strong new regulator, and ensuring that small and community financial institutions can participate in the new system.”

The legislative text can be found here.


A topline summary can be found here.


A detailed summary can be found here.


A section-by-section of the legislation can be found here.



2 thoughts on “2014: Maxine Waters proposed legislation that would “End Fan and Fred”

  1. Please post this on Tim Howards blog. I, and im sure others would like to read his response.
    I have great respect for your work. I also have great respect for the work that Tim has done and is still doing.
    I am trying hard to keep the faith.


    • Thanks Double K.

      There are definitely differing opinions… It appears likely that the House Finance Committee will resurrect action against FnF, driven predominately by R’s. I don’t agree that we should assume all D’s will be against the demise of FnF, especially Rep. Waters having just proposed a bill that would end FnF. I posted yesterday on The Center for Responsible Lending specifically because they had supported Rep. Water’s bill at the time. However, it appears that CRL has reconsidered their opposition on FnF and may be willing to support reform that includes FnF’s continued existence. I do believe we all should engage with Rep. Waters to ensure that she supports FnF’s future.

      I don’t think the Senate will support the demise of FnF, but we should be proactive with our engagement with them, too!


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