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» VISIT US ONLINE @ DSNEWS.COM stability in flood-prone housing markets. She says she also favors proposals to renew oversight of the Federal Housing Administration (FHA), to reform HUD's Section 8 Housing Choice Voucher Program, and to terminate failed housing programs, and she points to the Home Affordable Modification Program (HAMP) as an example. According to Biggert, too much regulation housing-related issue the winner of November's election will face is the impending "fiscal cliff" jutting up at the end of 2012. Probably the most important is hurting the housing market. "Congress needs to take a bipartisan approach to restore growth in the housing market," she told DS News. For Biggert, this path of restoration should include revisiting the Dodd-Frank Act and pulling back "the tide of over-regulation that is draining capital from the housing and credit markets." Regulatory reform, the congresswoman says, should include reforming the secondary mortgage market and in particular, Fannie Mae and Freddie Mac. "We need to reform the GSEs, and we need to do it in a methodical way that won't undermine recovery," Biggert said. With FHA, Fannie Mae, and Freddie Mac nearly monopolizing the mortgage market and taxpayers paying close to $200 billion to keep the GSEs afloat over the last four years, "it's unsustainable," Biggert said. She blamed a lack of legislative action on the absence of a detailed proposal from the Obama administration other than the largely rebuffed, broad outline released in 2011. Earlier this year, Biggert said, the House hands-off view when it comes to assisting individual homeowners. She strongly supports HUD-approved housing counseling programs, where local counselors guide families in communicating with their lenders and navigating mortgage finance issues. HUD-sanctioned counselors also advise new homebuyers to help them find financing and homes that match their budget and needs so they can avoid foreclosure down the road, Biggert explains. "We created an Office of Housing Counseling at HUD in 2010, and I hope to strengthen and improve on those initiatives," she said. Virginia Gov. Bob McDonnell, who was But Biggert doesn't take a complete adjustments to HAMP's Principal Reduction Alternative program (HAMP-PRA) and he has worked on getting the Internal Revenue Service to change the tax treatment of principal reduction. Reed was a co-sponsor of the Responsible Reed says he also supports making in the hunt to become Romney's running mate before Paul Ryan was chosen to fill out the Republican ticket, also supports housing counseling efforts and in fact, ensured funding for counselors was written into his most recent state budget. McDonnell also established a Foreclosure Financial Services Committee approved legislation she authored to prevent FHA from edging closer to insolvency. The bill, which did not pass the House, aimed to establish minimum annual premiums for mortgage insurance, bar unscrupulous lenders from participating in the government's mortgage insurance program, compel fraudulent lenders to repay FHA for losses, improve FHA's internal financial controls and disclosure requirements, and require the Government Accountability Office to review the safety and soundness of FHA. On the issue of underwater mortgages and foreclosures, Biggert said, "The leading cause of foreclosure among American families is unemployment. That's why, when it comes to foreclosure prevention, the best answer is a steady paycheck, not a new government finance scheme. Congress needs to keep the focus on pro-growth policies that will boost employment." Homeowner Refinancing Act of 2012, also known as the Menendez-Boxer bill, which did not pass. The bill would have extended streamlined refinancing for all Fannie Mae and Freddie Mac borrowers regardless of how far underwater they were. Supporters said the legislation would pay for itself because reduced default rates and foreclosures would minimize Fannie and Freddie's reliance on taxpayer funds. The senator said he agrees with Moody's Task Force, which met several times in 2011 to discuss state bills aimed at foreclosure and housing market issues. Ultimately, the governor supported the task force's finding that none of the proposed legislation should be adopted because the issues they targeted were addressed by federal regulations or the bills would not have had a positive impact on foreclosures or the housing industry, Jeff Caldwell, spokesman for McDonnell, explains. On the Democratic side, Sen. Jack Reed (D-Rhode Island), a senior member of the Senate Banking, Housing and Urban Affairs Committee, advocates for more government intervention on housing issues. To address the glut of foreclosure properties, economist Mark Zandi, who argues that an additional half-a-million principal reduction modifications through the middle of 2013 would significantly reduce the risk of more house price declines. Reed was also critical of FHFA's decision to prohibit principal reductions by Fannie Mae and Freddie Mac. "We need to build up to 500,000 loan modifications above and beyond those modifications that would occur under HAMP or proprietary loan mod programs to help put a floor on housing prices," explained Chip Unruh, Sen. Reed's spokesperson. "This is why Senator Reed championed the REO plan," Unruh continued, "has been pushing [for] principal reduction, and introduced the Project Rebuild Act," which would provide $15 billion for renovating vacant residential and commercial properties to help local communities recover from the foreclosure crisis. Housing's recovery is vital to national Reed says he urged the Obama administration and FHFA in 2010 to convert REO properties into income-producing rental homes. He supports FHFA's pilot REO rental program announced in August 2011 and advocates rolling out the initiative on a broader basis once the kinks are ironed out. prosperity, so for the next president, faced with a sluggish economic recovery and headwinds on both international and domestic fronts, housing remains the most important single industry to address—whether that means standing back and letting markets run their course or instituting structured programs to reduce principal, interest rates, and the mortgage debt burden for borrowers, only time will tell. 73

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