American Banker: Backers of Senate GSE plan reject claims that it’s too conservative

American Banker, January 24, 2018: Backers of Senate GSE plan reject claims that it’s too conservative

Supporters of an unreleased Senate bill to revamp the housing finance system are fighting back against suggestions that the latest revision has become more conservative, arguing that it’s a centrist plan that should have wide bipartisan appeal.

American Banker reported last week on an outline of the plan, which would put Fannie Mae and Freddie Mac into receivership and create multiple private mortgage guarantors backed by an explicit government guarantee.

That broadly tracks a Federal Housing Finance Agency blueprint for housing finance reform, but the two plans diverge on certain details including how they handle affordable housing incentives and whether to mandate a specific rate of return for future guarantors that would replace Fannie and Freddie.

Progressive groups are concerned that a housing finance system without Fannie and Freddie in their current state could jeopardize affordable housing, but Parrott said the plan that is being developed would ensure there is funding for low- and middle-income borrowers.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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