The U.S. Mortgage Market... Changing The Status Quo

A New American Framework...

Thought we all needed a little break from that often obscure discussion of the U.S. mortgage market, Fannie Mae/Freddie Mac, and the 30-year fixed rate mortgage loan ( see posts - 4/22-26/2013, May 1), but we probably need to go at least one more round.  Why? 

"Wasn't Watt the one who told Marquis
where to ... Like that kind of honesty."

Because Representative Mel Watt from North Carolina has just been nominated to head the Federal Housing Finance Administration (FHFA), the oversight body which is in charge of the conservatorship of Fannie and Freddie.

"Competence? Can't you
 give me a better reason?"

Mr. Watt is a long-time member of the House Financial Services Committee, Yale-trained lawyer, intelligent, balanced, unquestionably capable. And, of course, with those kind of credentials you know his appointment will be controversial in today's bitter, Washington atmosphere, where dead-headed dogma frequently is seen to trump competence.

If you'd like a little foreshadowing of what's ahead, take a look at these excerpts on the Watt nomination from the WSJ (Nick Timiraos, 5/4/2013): 

" But rather than speed a decision on the future shape of housing finance, the appointment shows the mortgage status quo is likely to prevail."

"In some ways the appointment shouldn't be too surprising, few in Washington are eager to make the hard decisions that would accompany a mortgage market overhaul. Pushing any proposal, for example, that may threaten the existence of the fixed, 30-year mortgage product is a political loser..."

Why not rebuild ...
 based on our past success?

So evidently, despite the recent catastrophic collapse of the U.S. economy - triggered by clearly corrupt mortgage practices and financially unsound mortgage products - the 30-year fixed rate based, U.S. mortgage market will be retained.  A "house of cards" rebuilt on a political foundation of sand.

What should one do in this situation? Very knowledgeable folks say that mortgage reform "is a political loser".  (You and I certainly wouldn't want to be branded as "losers" now would 
we ?) 

Changing the status quo always means going against the grain, the common wisdom, "the way things are".  Generally you stand alone, quite often you lose.  Asked CUNA what its position was on reform of the mortgage market...

"Uniting for Good !!"

CUNA said it supported the status quo. 

CUNA evidently does not want to risk being seen as "a loser" in Washington...

An unsurprising position....