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25 » VISIT US ONLINE @ DSNEWS.COM ACTIVISTS URGE WHITE HOUSE NOT TO ABANDON GSE REFORM Several civil rights and housing advocacy groups called for the White House to take action on the lingering issue of GSE reform, which some top officials in the Obama Administration said will not hap- pen during the last year-plus of Obama's presidency. Representatives from the Leader- ship Conference on Civil and Human Rights, the Center for Responsible Lending (CRL), the National Commu- nity Reinvestment Coalition (NCRC), and the Labor Council for Latin American Advance- ment (LCLAA) all called on the Obama Administra- tion to address the state of the housing finance system for minority communities, outlining steps they believe the Administration should take to address perceived economic and racial disparities, according to a report on ValueWalk. One of those steps is GSE reform—removing Fannie Mae and Freddie Mac from conservator- ship of the Federal Housing Finance Agency (FHFA), where it has been for seven years after receiving a combined $187.5 billion bailout, and recapitalize them. Obama Administra- tion officials such as Treasury Secre- tary Jack Lew have warned in the last month that such a "recap and release" program for Fannie Mae and Fred- die Mac would put the GSEs at risk of another bailout; however, the GSEs' Q 3 earnings reports showed a $475 million net loss for Freddie Mac and a decline of more than 50 percent in Fannie Mae's quarterly net income (from $4.6 billion in Q2 down to $2 billion in Q 3), prompting their boss, FHFA Director Mel Watt, to declare that they may need a bailout anyway. On a press call, Leadership Conference President and CEO Wade Henderson criticized the Obama Administration's failure to let the GSEs regain financial stability and also the Administration handing the task of GSE reform to Congress, where no progress has been made despite general bipartisan agreement that some sort of GSE reform needs to take place. "Which Congress are they talking about?" Henderson said. "e House just pushed out its last Speaker because he wasn't eager enough to shut down the federal government, and it hasn't shown it can handle any other complex policy issue–especially one that ought to be biparti- san. Putting the future of our nation's housing finance system in the hands of this House, while refusing to do what can be done under existing law, shows a level of naiveté and a seeming indif- ference to the consequences of the status quo that is truly disturbing." CRL President Mike Calhoun pointed out that the way the GSEs that operate today under conservatorship is "far different" from the GSEs that operated prior to being seized by the government in 2008. "We have already made major reforms to make them safer and more effective," Calhoun said. "We need to continue that process and sup- port the housing market and the entire economy, by strengthening broad access to all sustainable homebuyers and all responsible lenders, improv- ing fair lending, and properly structuring and incentivizing the GSEs." NCRC director Gerron Levi said his organization's stake in reforming the GSEs is to preserve the affirmative obligations in the GSEs' charters and their affordable housing goals that ensure all creditworthy borrowers can access mortgage credit. "Because of the policy and political un- certainty ahead, we believe that only way to preserve the affordable housing goals is for the Obama administration to recapitalize the GSEs, end the conservatorship, and to continue building on the reforms of strong supervision and oversight enacted as part of the Housing and Economic Recovery Act of 2008," Levi said. Hector Sanchez, executive director of the LCLAA, said he believes the GSEs in their current state are shutting out homeownership opportunities for Latinos and therefore keeping them from wealthbuilding opportunities, which can potentially have negative consequences for the economy. "e economic implications of having a majority of Latinos, which will make up a third of the country by 2050, spending more than half of their income in the rental market will have serious effects on our nation's economy," Sanchez said. "We must encourage wealth building for Latinos because they will continue to play a key economic role in the future." "The House just pushed out its last Speaker because he wasn't eager enough to shut down the federal government, and it hasn't shown it can handle any other complex policy issue–especially one that ought to be bipartisan." –Wade Henderson, President of the Leadership Conference on Civil and Human Rights

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