Senator Corker Introduces “Jumpstart GSE Reform Act”

Thursday, March 14, 2013

In an effort to spur substantive and structural housing finance reform, Senators Bob Corker, R-Tn., Mark Warner, D-Va., David Vitter, R-La., and Elizabeth Warren, D-Ma., all members of the Senate Banking, Housing and Urban Affairs committee, on Thursday introduced the “Jumpstart GSE Reform Act.” 

The legislation would prohibit any increase in the guarantee fee – which is required to be charged by government-sponsored enterprises Fannie Mae and Freddie Mac – from offsetting other government spending. Additionally, the bill would prohibit the sale of preferred shares without congressional approval and structural housing finance reform. The preferred shares were purchased by the U.S. Treasury Department during the 2008 financial crisis and are within Treasury’s discretion to sell or otherwise dispose of. Any premature actions outside of structural reform will only build obstacles to a new housing finance system.

“The reality is that if Congress were to spend ‘g’fee’ revenue from the GSEs on other programs, reforming these mortgage behemoths would become nearly impossible. At the same time, if Treasury were to decide to sell its preferred share investment without Congress having first reformed our housing sector, we would just be returning to a time where gains are for private shareholders and losses are for taxpayers. Neither of these is an acceptable outcome, so I’m very happy that Senators Warner, Vitter and Warren have joined me in this effort, and I hope Congress will take the necessary steps to ensure housing finance reform can happen as soon as possible,” said Senator Corker.

“We know our housing finance system is not sustainable in its current form, and this legislation will keep us on a path to accomplish real reforms. We believe that as we transition Fannie and Freddie out of their present roles, we need to think about the system in its entirety. The guarantee fee should not be mixed with other funding needs, and the preferred shares should be handled as one step within a multi-year process. I look forward to working with Senator Corker and Senators Vitter and Warren on these important reform issues,” said Senator Warner.

“Reforming a broken housing finance system and protecting taxpayers is a win win, and we can begin that effort with this bipartisan GSE reform proposal. This bill shows that Republicans and Democrats do agree on the urgency required to reform the mortgage finance system. Reform can’t happen if the U.S. Treasury pulls a fast one on taxpayers by selling their preferred share investment but our bill will ensure the taxpayers will get the reform they were promised in 2008,” said Senator Vitter.

“It has been nearly five years since the financial crisis, and it is past time to reform Fannie and Freddie. That means removing the obstacles and starting a bipartisan effort to take on housing finance reform this Congress.  I am pleased to have the opportunity to work with Senators Corker, Warner, and Vitter, and I look forward to collaborating with them and other Senators in the months ahead on this important issue,” said Senator Warren.

 


Apartments On McCutcheon Road Sell For $29.5 Million

An apartment complex on McCutcheon Road has sold for $29.5 million. The sale of the Bridgeway of Chattanooga Apartment homes was to Chattanooga Apartment Properties Lp from Bridgeway Chattanooga Realty Partners Llc. The new owner has offices at Seven Fields, Pa. (click for more)

Walnut Commons Reaches Agreement To Pay $761,000 For Ground Rights

The Walnut Commons apartment complex at Walnut Street and Riverfront Parkway has reached an agreement to acquire the ground rights for $761,000. The Chattanooga Downtown Redevelopment Corporation, a city board, now holds the ground lease and is due payments based on the cash flow of the apartments. There was a disagreement earlier on the amount owed, and the city wound up ... (click for more)

County School Board Considers "Best Practices Audit" On Compliance With Board Policies

The County School Board is considering carrying out a "Best Practices Audit" to determine if board policies are filtering down to the school level. Board member Greg Martin said members of the Superintendent's Student Leadership Council told him that only a fraction of students are familiar with board policies on bullying and other topics. Steve Highlander, another board member, ... (click for more)

Several Central City Schools Overcrowded, School Board Is Told

All the county school overcrowding is not out in the fast-growing East Brainerd and Ooltewah sections, school board members were told Thursday. Several central city schools are far above capacity. East Lake Elementary - with 655 students and a capacity of 493 students - is at 133 percent occupancy. Calvin Donaldson, Orchard Knob Elementary and East Side Elementary also are ... (click for more)

Innocent Until Proven Guilty, Even Athletes

From reading Randy Smith's column on the lawsuit against UT it is pretty evident that he never took a legal course in his life. I was under the impression that in this country one was innocent until proven guilty in a court of law. It appears this no longer applies to athletes(particularly black athletes) in the U.S. in 2016. I have always said that if I am picked for jury duty ... (click for more)

Roy Exum: Warmth For Cold Days

I come across all sorts of warm things every day and as we burrow out of sub-freezing temperatures for a day or two, shaking off ice and snow, allow me to share a few things for a change that may take the bite out of the winter wind. This is what helps me. * * * Judy Bellenfant, who has been a soul mate ever since we shared jokes in high school classrooms, sends along this ... (click for more)