Elizabeth Warren defends Fannie and Freddie
October 29th, 2013
01:30 PM ET
9 years ago

Elizabeth Warren defends Fannie and Freddie

Washington (CNN) - Sen. Elizabeth Warren of Massachusetts Tuesday took her crusade for income equality in the United States to the 100th annual convention of the Mortgage Bankers Association.

In remarks at the Washington Convention Center, Warren admonished the rapid growth of sub-prime mortgages as the underlying cause of the housing crisis that has dragged on for the last several years while defending Fannie Mae and Freddie Mac, the government-backed housing finance giants that required a massive bailout in 2008 when their housing investments soured.

"Home ownership remains the centerpiece of the American dream," she said.

Citing lower down payments than in other parts of the world and the prevalence of 30-year mortgages, she pressed, "It's critical that we fight to maintain the unique character of American housing."

And getting housing reform wrong as it moves through Congress, she said, would be disastrous for the middle class.

"We need reform, but it must be targeted reform that preserves the good things about the pre-crisis system," she said, adding that good reform could temper the boom-bust cycle of the housing market.

Sens. Bob Corker, a Republican from Tennessee, and Mark Warner, a Democrat from Virginia, have introduced a bill to reform government involvement in the housing market. Warren applauded the two moderate Senators efforts for putting the issue in motion but warned that it isn't a perfect bill.

Instead, she offered her own five-pronged approach to housing reform.

First, Warren pressed the need for the government to explicitly guarantee mortgage-backed securities.

"The housing market is so important and so large," she said, "there is no plausible scenario in which the government does not guarantee at least a portion of it."

She pressed the need to adequately regulate market participants, increase beneficial loan modifications and ensure smaller lenders have a place in the market.

"We must not end up with a housing market that crowds out smaller financial institutions," said Warren, one of the key architects of the Consumer Financial Protection Bureau.

The freshman Democrat has become a darling of progressives, and her populist approach to policy could make her an attractive candidate to the left in the 2016 presidential primaries if she pursues a bid. Several small progressive groups in Washington already are trying to present Warren as an alternative to a potential Hillary Clinton candidacy.

Filed under: Elizabeth Warren • Fannie Mae
soundoff (12 Responses)
  1. Dutch/Bad Newz, VA -aka- Take Back The House -aka- No Redemption Votes

    She pressed the need to adequately regulate market participants
    Something that was completely void prior to the 2008 crisis. I wouldn't have used the word adequately though. Probably "vigorously" regulate market participants. After watching the last 3 weeks of JP Morgan getting hit with lawsuit after lawsuit, why should there be any lax regulating? We still want heads to roll and people to be put in jail behind the criminality of the housing crisis. Let's start with that first!!!

    October 29, 2013 01:39 pm at 1:39 pm |
  2. just asking

    crusade for income equality??? this leftist looney tune was getting almost half a million dollars a year from harvard for doing almost nothing. did she give all that money away to poor people to help close the income gap? of course not. this commie is the new face of the democrat party. wake up america.

    October 29, 2013 01:41 pm at 1:41 pm |
  3. Donna

    First, Warren pressed the need for the government to explicitly guarantee mortgage-backed securities.

    Correction: NOT the government, the USA TAXPAYER! So the US taxpayers are being asked to guarantee mortgages when they have no way of knowing if they are good or not. The US government needs to GET OUT of guaranteeing mortgages! If banks make bad loans then let them suffer the consequences! Why should the US taxpayers have to pay for THEIR mistakes?!

    October 29, 2013 01:45 pm at 1:45 pm |
  4. Tony D

    This woman is certifiably insane, as most Democrats from Massachusetts are. We might as well have Fidel Castro in the Senate. He's a communist just like her.

    October 29, 2013 01:49 pm at 1:49 pm |
  5. Dar

    This is one wacky look chic, No wonder Obama likes her.

    October 29, 2013 02:00 pm at 2:00 pm |
  6. smith

    Oh no, the woman who tells small business "You didn`t build that". The housing market plunged because Clinton made changes in the community reinvestment act which forced banks to give loans to people that couldn`t afford them. The banks gladly took these people for a ride.

    October 29, 2013 02:00 pm at 2:00 pm |
  7. Data Driven

    Conservatives don't like Fannie and Freddie. Apparently, according to conservatives, blacks and other minorities were able to finance homes that they weren't good enough to own. Or something.

    In fact, minority home ownership caused the Great Recession.

    October 29, 2013 02:07 pm at 2:07 pm |
  8. tom l

    "Conservatives don't like Fannie and Freddie. Apparently, according to conservatives, blacks and other minorities were able to finance homes that they weren't good enough to own. Or something."

    Actually, conservatives couldn't care less about blacks or other minorities owning homes. They want QUALIFIED people to finance homes. It doesn't matter what the color of their skin is. When you reduce the standards, as was done and what actually caused the snowball effect of the recession, you get bad loans. Bad loans = default. The default must be covered by you and me (Fannie and Freddie) and that's not right. If you are qualified through your income, debt ratios and loan to value then what difference does it make what color of skin the person has??? I can't believe you have lowered yourslef to make that kind of comment.

    In fact, it wasn't "minority" ownership, it was bad loans. Period. And those bad loans were guaranteed by Fannie and Freddie. I'm just blown away right now by your comment. Did you take Sniffit's moniker and use it yourself?

    October 29, 2013 02:20 pm at 2:20 pm |
  9. Democrat/Communist Party

    Elizabeth Warren is to the left of Fidel Castro on the political scale. This women should be no where near the reigns of power. Unless of course your goal is to take the USA down.

    October 29, 2013 02:23 pm at 2:23 pm |
  10. The Real Tom Paine

    Tom l, please don't ignore the LONG history the right has of employing racial discrimination in lending, housing or any number of subjects. You always implore liberals to face the truth, so why can't you?

    October 29, 2013 02:39 pm at 2:39 pm |
  11. Data Driven

    Tom, before you clutch those pearls too tightly, please understand that I don't make this stuff up. I get it these talking points from Red State, NRO, and AM radio. This has long been a meme in the right wing. If it bothers you, tell them about it.

    October 29, 2013 02:41 pm at 2:41 pm |
  12. Data Driven

    Oh, and Tom? Google "banks, lending, housing, minorities" - I'm sure you'll find plenty of info on how are cities were ghettoized, particularly in the early decades of the 20th century.

    October 29, 2013 02:53 pm at 2:53 pm |