The Wheels of Housing Regulation Grind On
By Arnold Kling
The Federal Housing Finance Agency (FHFA) has sent to the Federal Register a proposed rule to establish a framework for affordable housing goals for the 12 Federal Home Loan Banks (Banks). The proposed rule implements provisions of the Housing and Economic Recovery Act of 2008 that require FHFA to establish housing goals for the Banks’ purchases of mortgages consistent with the housing goals established for Fannie Mae and Freddie Mac, taking into account the unique mission and ownership structure of the Banks.
The Federal Home Loan Banks were obsolete decades ago, but nobody ever bothered to shut them down. I do not think there is a soul outside of Washington who is in favor of “affordable housing goals” for mortgage lenders.
But I would bet $100 that even if Tea Party sympathizers won a Congressional majority in November, this regulatory train would not be stopped. You have no idea how hard it is to change things in Washington. They just have a completely different mindset in this town.