Treasury Notes

Today’s Washington Post article on housing finance reform mischaracterizes a number of the core housing finance reform principles that the Obama Administration laid out in its February report to Congress on the future of housing finance. We want to set the record straight.

The Obama Administration believes that the private sector – subject to strong oversight and consumer protection – should be the dominant provider of mortgage credit.

That’s why, in each of the three options we outlined in our report to Congress, the government's footprint in the housing finance market will shrink substantially.

That’s why, in each of the options, any government support for housing finance will be targeted and limited. This will help ensure that taxpayers are protected and the private sector bears the burden for losses.

For now, Fannie Mae and Freddie Mac are playing a critical role in providing support to a still-fragile housing market and making mortgage credit available. However, in each of the three options, Fannie Mae and Freddie Mac will be wound down on a responsible timeline.

Moving forward, these principles will guide our efforts as we continue to work with Congress to reform America’s housing finance market.

The Washington Post article also makes a factual error in suggesting that the Administration has settled on a single proposal for the long term structure of the housing finance market. In fact, at the request of the President, the housing finance reform team at the White House, the Treasury Department, and the Department of Housing and Urban Development continues to weigh and analyze each of the options laid out in the Administration’s report to Congress.

Today, our focus must be on both healing a still-struggling housing market and taking the steps necessary to bring private capital back into the housing market. The principles we have laid out will help lead to a future system with more private capital, more oversight, and less risk to the taxpayer – in short, to a healthier, more stable system of housing finance.

Neal S. Wolin is Deputy Secretary of the Treasury