Principles of Housing Finance Reform

by Susan M. Wachter (Editor), Joseph Tracy (Editor)

Overview

In the fall of 2008, the world watched in horror as the U.S. housing finance system shattered, triggering a global financial panic and ultimately the Great Recession. Now, nearly a decade later, the long and slow housing recovery has reached a critical moment. Though the housing finance system has stabilized, it remains in the hands of the federal government, leaving taxpayers exposed to the credit risk while private funding remains mostly on the sidelines.

Principles of Housing Finance Reform identifies the changes necessary to modernize the housing finance system, identifying guiding principles that should underlie a rebuilt system. Contributors to the volume set out a wealth of innovative solutions that are possible within this framework, presenting proposals for long-term structural reforms that would infuse new life into the U.S. housing finance system while enhancing long-term stability.

Nearly a decade after the inception of the Great Recession, reform proposals have arisen across the political spectrum. This is a moment of opportunity for rebuilding a key sector of the U.S. economy. The research in this volume represents the best thinking of policy researchers and economic experts on the challenges that lie ahead and provides a roadmap for reforms to create a system characterized by liquidity, stability, access, and sustainability.

Contributors: W. Scott Frame, Meghan Grant, John Griffith, Diana Hancock, Stephanie Heller, Akash Kanojia, Patricia C. Mosser, Kevin A. Park, Wayne Passmore, Roberto G. Quercia, David Scharfstein, Phillip Swagel, Joseph Tracy, Susan M. Wachter, Dale A. Whitman, Mark A. Willis, Joshua Wright.

Product Details

ISBN-13:	9780812293739
Publisher:	University of Pennsylvania Press, Inc.
Publication date:	08/10/2016
Series:	The City in the Twenty-First Century
Sold by:	Barnes & Noble
Format:	eBook
Pages:	288
File size:	4 MB

About the Author

Susan M. Wachter is the Albert Sussman Professor of Real Estate and Professor of Finance, The Wharton School; Professor of City and Regional Planning, School of Design; and Co-Director, Penn Institute for Urban Research, at the University of Pennsylvania. Joseph Tracy is Executive Vice President and Special Adviser to the President of the Federal Reserve Bank of New York.

Table of Contents

Introduction Susan M. Wachter Joseph Tracy 1

Part I Structural Reform Options

Chapter 1 Legislative Approaches to Housing Finance Reform David Scharfstein Phillip Swagel 7

Chapter 2 The Capital and Governance of a Mortgage Securitization Utility Patricia C. Mosser Joseph Tracy Joshua Wright 32

Chapter 3 Macroprudential Mortgage-Backed Securitization: Can It Work? Diana Hancock Wayne Passmore 68

Part II Housing Finance: Beyond the Basics

Chapter 4 Reforms for a System That Works: Multifamily Housing Finance Mark A. Willis John Griffith 107

Chapter 5 The Once and Future Federal Housing Administration Kevin A. Park Roberto G. Quercia 131

Chapter 6 The Federal Home Loan Bank System and U.S. Housing Finance W. Scott Frame 150

Part III Housing Finance Infrastructure

Chapter 7 The TBA Market: Effects and Prerequisites Akash Kanojia Meghan Grant 167

Chapter 8 The Significance and Design of a National Mortgage Note Registry Stephanie Heller Dale A. Whitman 186

Chapter 9 Informed Securitization Susan M. Wachter 209

Notes 223

References 247

List of Contributors 269

Index 275

Editorial Reviews

"Principles of Housing Finance Reform provides an instructive and realistic assessment of key legal, regulatory, and marketplace issues facing policymakers in reshaping the Nation's housing finance system."

Ed DeMarco

"Principles of Housing Finance Reform is full of interesting, often highly idiosyncratic information about how the U.S. housing finance system works, or often doesn't work. By collecting the essays of leading scholars into one volume, editors Susan M. Wachter and Joseph Tracy provide a very useful public service."

The New School Robert Buckley

"Discussions of fixing the U.S. housing finance system often devolve into theoretical tussles that do not connect to the real world complexities of transforming a ten-trillion-dollar market. Not so with the practical, analytical and reasonable recommendations contained in Principles of Housing Finance Reform which provides a well-researched roadmap for reform."

Andrew Davidson

"The book is straight on American housing financial system and is highly interesting, if you want to learn about and to analyze the system . . . It is magnificient that the authors present and analyze serious proposals instead of just criticizing, when something has got off the track."

Journal of Housing and the Built Environment

"The shortcomings of America's housing finance system were vividly exposed after the crash of 2007, but we have yet to meaningfully reform that system. This edited volume provides an excellent guide to how reform should occur. Wachter and Tracy have brought together a terrific set of papers which map out the intellectual terrain and provide a rich set of ideas about fixing America's housing system. Anyone who is hoping that our future housing policies will be better than our past housing policies would do well to read this book."

Harvard University Edward Glaeser

"The book is straight on American housing financial system and is highly interesting, if you want to learn about and to analyze the system . . . It is magnificient that the authors present and analyze serious proposals instead of just criticizing, when something has got off the track."—Journal of Housing and the Built Environment

"Discussions of fixing the U.S. housing finance system often devolve into theoretical tussles that do not connect to the real world complexities of transforming a ten-trillion-dollar market. Not so with the practical, analytical and reasonable recommendations contained in Principles of Housing Finance Reform which provides a well-researched roadmap for reform."—Andrew Davidson, President, Andrew Davidson & Company

"Principles of Housing Finance Reform provides an instructive and realistic assessment of key legal, regulatory, and marketplace issues facing policymakers in reshaping the Nation's housing finance system."—Ed DeMarco, former Director of the Federal Housing Finance Agency (FHFA) and current Senior Fellow, Milliken Institute

"The shortcomings of America's housing finance system were vividly exposed after the crash of 2007, but we have yet to meaningfully reform that system. This edited volume provides an excellent guide to how reform should occur. Wachter and Tracy have brought together a terrific set of papers which map out the intellectual terrain and provide a rich set of ideas about fixing America's housing system. Anyone who is hoping that our future housing policies will be better than our past housing policies would do well to read this book."—Edward Glaeser, Harvard University

"Principles of Housing Finance Reform is full of interesting, often highly idiosyncratic information about how the U.S. housing finance system works, or often doesn't work. By collecting the essays of leading scholars into one volume, editors Susan M. Wachter and Joseph Tracy provide a very useful public service."—Robert Buckley, The New School

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