It will not surprise anyone reading this that serious problems persist in the housing sector. Many solutions have been proposed, including several pieces of legislation I have introduced in Congress, to help homeowners, completely reform our housing finance system and fix the housing crisis. Most of the proposals out there are focused on struggling homeowners trying to make the next payment and are about the greater good of the country. However, you may or may not be surprised that a couple of California cities have decided to not waste a good crisis, to paraphrase the now infamous axiom, realizing there is a lot of cash to be made off underwater homeowners.

In an astonishingly expansive and untenable interpretation of eminent domain authority, several local governments, notably San Bernardino, have proposed plans to override private property rights through a scheme that is specifically designed to make money for over-leveraged cities. This scheme is being sold as assistance for hurting homeowners, but it is purely a ploy to use federal tax dollars to seize distressed home loans and force unconventional, yet profitable loan modifications.

However, not only will… Read More

About 10 days ago, I wrote you all about the Housing Finance Reform Bill (H.R. 1859) that I have written and am sponsoring along with Gary Peters (D-MI). I mentioned in that missive that this is an important bill that will consume a great deal of my time and energy over the coming months. Based on the numerous responses from all of you, you seem to agree. I appreciate all those who responded offering your support and assistance in moving this bill forward. I will be separately contacting those of you who did soon.

Reading your responses last week, I noticed there were questions on this fairly complex issue that came up several times. So, I have decided to include the “most asked” questions into this edition and am answering them to give you an even better idea of what this bill is, how it works and why I wrote it:

1. John, isn’t your bill just recreating the Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac again? It looks like you are just going to have 5 of them instead of two.

No. The whole point of this bill is to kill the old GSE system and replace it with something completely different that will provide… Read More