National Housing Crisis Task Force

I would like to direct your attention to a new advocacy group. The National Housing Crisis Task Force.

They appear to be a serious new group aiming all their cannons at the problem. Today, they released a report titled, “From Crisis to Transformation: A Federal Housing Policy Agenda” (pdf).

It is a thorough and thoughtful agenda with dozens of policy suggestions. And, to my eye, not a single policy suggestion in the report is misguided. That is quite a feat. Sincerely.

Anyway, as is my wont, I was doom-scrolling it, anyway, grumbling to myself that, as good as the report is, they will surely be ignorant of the mortgage problem, and so for all its thoughtfulness and thoroughness, surely, they will leave out the one policy change that would make more of an immediate difference than all the others.

But I was wrong!!

Direct your gaze to Policy Agenda Point B.7:

REVIEW CHANGES TO CURRENT MORTGAGE UNDERWRITING CRITERIA TO STIMULATE HOMEBUILDING

In the aftermath of the Great Recession, mortgage underwriting criteria became much stricter. As a response to the predatory practices of the late 1990s and early 2000s, this was undoubtably the right move; the subprime crisis and predatory lending harmed too many individuals and communities across the country. However, for much of the twentieth century, underwriting criteria were more lenient than they are today, while still adequately ensuring that borrowers could safely and securely afford the house they were purchasing. The White House should direct the Federal Housing Finance Agency and the Consumer Financial Protection Bureau to review what the projected housing supply impact would be of allowing households with near-prime credit scores who qualified for mortgages in the twentieth century to obtain them again. Some analysts have estimated enabling this large group to qualify for mortgages as they did in the twentieth century would spur the construction of large amounts of starter homes because builders would have buyers again for them. If such lending can be conducted safely, as it was throughout most of the twentieth century, it could boost housing construction as renters with near-prime credit scores become eligible to buy again. Lenders could then adjust eligibility criteria, and starter home construction could increase. At the same time, it is crucial to ensure that homeownership and mortgages are not predatory. As such, HUD must continue to invest in homebuyer education and counseling that improves credit scores and financial literacy for home purchasers. Positive Rent Reporting should be expanded to ensure that those who live in federally regulated housing can continue to build positive credit scores as a result of on-time rental payments. And supports should be in place, such as post-sale counseling and support for first generation and first-time homebuyers, to ensure that post-purchase expenses do not result in financial hardship for new homeowners.

Relevant Agencies: Federal Housing Finance Agency, Consumer Financial Protection Bureau, HUD

Type of Action: Year One Administrative Action

Be still my heart! The unnamable has been named. It has been spoken into the world!

And, that last line! “Year One Administrative Action”. I’ve got the vapors.

Just as impressive, I don’t see anything in the report blaming corporate investors for rising rents or prices.

It’s got the good stuff, and it’s got none of the nonsense.

What a pleasant breath of fresh air.

To better days ahead!