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72 GSE Reform has been a hot-button issue since the GSEs were put into conservatorship over a decade ago, and rightfully so. e housing and housing finance markets continue to evolve. While demand for homeownership remains high, many borrowers are coming to the market with increased amounts of student loan debt and a job market that is increasingly being shaped by the emerging gig economy. Much has been written about the lack of available housing inventory, especially at a price point geared toward first-time homebuyers. e housing market has had a good, extended run since we turned the corner from the Great Recession, but many economists are sounding warning bells about potential bubbles, and now the latest news on the global economy is less than stellar. Even if you believe that there are no impending challenges to the housing market, it does not follow that reform isn't needed. It is indeed very much needed. Simply consider the changes we've seen to the job market, to student lending, and to the demographics of potential homebuyers, just to name a few. However, despite the constantly evolving market, it does not appear that legislative reform is imminent. at does not mean that reform is not happening—it is happening on an almost daily basis via regulatory actions. Regulators are stepping into the void and taking actions that could have immediate and material impact on the housing market. In this environment, it is important that legislators and policy makers watch closely to make sure that regulatory changes further the important objectives of ensuring a stable housing market with access to affordable, sustainable mortgage lending for home-ready borrowers, protecting taxpayers, promoting stability in housing finance, and fostering transparency. If each of these four principles is kept at the center of the discussion, we will be able to move forward as an industry in a much more stable and positive way, benefitting all of our customers, whether they are homeowners, homebuyers, or taxpayers. I. Protect Taxpayers—A priority of any housing reform plan should be to promote private capital taking first loss risk ahead of any taxpayer exposure to mortgage defaults 1 . Ensuring that private capital takes the first risk of loss at the time a loan is made must HOUSING REFORM: STEP BY STEP Feature By: Rohit Gupta