U.S. Senators Bob Corker and Mark Warner have introduced a bipartisan amendment to H.R. 2577, the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act in an effort to spur substantive and structural housing finance reform. The amendment, known as the Jumpstart GSE Reform Act, was introduced by Corker, Warner, Senator Elizabeth Warren, and Senator David Vitter in September and offered on Thursday by Corker and Warner as an amendment to H.R. 2577.
The Jumpstart GSE Reform Act prohibits the sale of Treasury-owned preferred shares in Fannie Mae and Freddie Mac without approval from Congress, and also prohibits increases in guarantee fees charged by the GSEs from offsetting non-housing related government spending. Corker stated, quote, Although the FHFA is taking important steps to de-risk Fannie Mae and Freddie Mac, taxpayers will continue to be on the hook for a future bailout if Congress does not produce legislation to transform our housing finance system. Close quote
A continuing decline in distressed inventory nationwide has resulted in an accompanying continuing decline in the percentage of home sales that are all-cash transactions, according to data released Thursday by CoreLogic. At their peak in January 2011, cash sales accounted for nearly half of all residential home sales in the United States at 46 point 5 percent. Since then, that percentage has steadily declined; in August 2015, it was reported at 31 point 7 percent, less than one-third of all home sales—a decline of more than 3 percentage points from August 2014, when it was 34 point 9 percent.