Highlights: Geithner calls for housing policy change

WASHINGTON (BestGrowthStock) – U.S. Treasury Secretary Timothy Geithner said on Tuesday fundamental change is needed in the housing industry but appeared to back some mortgage guarantee.

Following are highlights from the Obama administration conference on reforming housing finance:

TREASURY SECRETARY TIMOTHY GEITHNER:

“Fixing this system is one of the most consequential and one of the most complicated economic policy problems we face as a nation.”

“Alongside the many broader failures that contributed to this financial crisis, there are several that directly involved the government-sponsored entities Fannie Mae and Freddie Mac. Amid the general race to the bottom in credit standards across the private sector, Fannie and Freddie lowered their underwriting standards, providing guarantees for increasingly risky types of mortgages, without charging enough to cover the risks.”

“This administration will side with those who want fundamental change. It is not tenable to leave in place the system we have today. We will not support returning Fannie and Freddie to the role they played before conservatorship, where they fought to take market share from private competitors while enjoying the privilege of government support.”

“I believe there is a strong case to be made for a carefully designed guarantee in a reformed system with the objective of providing a measure of stability in access to mortgage finance even in future economic downturns.”

HOUSING AND URBAN DEVELOPMENT SECRETARY SHAUN DONOVAN:

“The government’s footprint in the housing market needs to be smaller than it is today, where FHA and the GSEs collectively guarantee more than 90 percent of all mortgages.”

(Compiled by Emma Ashburn)

Highlights: Geithner calls for housing policy change