Housing Finance Reform
Fannie Mae and Freddie Mac greatly contributed to the housing bubble, the 2008 financial crisis and the dramatic government intervention that resulted. In the lead up to the crisis, they were dangerously undercapitalized, holding just 45 cents in capital for every 100 dollars in mortgages they guaranteed. The government assumed control of these two multi-trillion dollar companies because they lacked sufficient capital to cover expected losses, ultimately costing taxpayers more than $180 billion in bailouts, crushing our economy and undermining America’s international standing. Nearly six years later, our broken housing finance system remains the most significant component of the crisis still completely unaddressed.
Americans deserve a robust, sustainable housing finance system that will provide future economic opportunities for millions of families and individuals. As Ranking Member of the U.S. Senate Committee on Banking, Housing and Urban Affairs, I recently joined Chairman Tim Johnson (D-South Dakota) to introduce legislation to wind down Fannie and Freddie, end the government domination of the housing market and promote the re-entry of private capital into our housing finance system.
Johnson - Crapo S.1217
Bipartisan Policy Center: Status Quo Fact Sheet - Johnson Crapo
Frequently Asked Questions
Reforming our housing finance market is a challenging, complex issue. Click here to read some of the most common questions and answers regarding the bill to fix our broken system.
