Affordable housing is one of the sticking points keeping the secondary mortgage market reform bill from advancing in Congress.
Opponents to any mandates being included in a reform law are beating the drums, screaming that subsidization of affordable housing caused the mortgage crisis.
The truth is not so clear cut. Yes, plenty of low and moderate income borrowers ran into problems during the bust. However, so did borrowers of most demographic groups. The common denominator seems to be that these borrowers were put into inappropriate mortgage products.
But when borrowers were put into the right product in the years before the boom, affordable housing worked. Countrywide had a very successful affordable housing program. It was greed that eventually did the one-time industry leader in.
Homeowners from all walks of life ended up in trouble during the bust because the mortgage industry was more focused on making a buck rather than doing the right thing.
With the right product and the right tools in place, many low and moderate income families are and will be successful homeowners.
The creation and rehabilitation of rental housing is another way affordable housing goals can be advanced. Not every person is cut out to be a homeowner. They are entitled to have a safe environment to live in as well.
Fannie Mae and Freddie Mac's multifamily lending programs remain successful providers of capital to help meet these needs. Any reform must include the continuation of these programs.
L.A. Clippers owner Donald Sterling's reprehensible comments about race could have been a starting point for an honest discussion about affordable housing needs and goals, especially given his troubles when it came to fair housing.
Instead, political rhetoric is obscuring the need to create sustainable affordable housing program will remain obscured.
Brad Finkelstein is the originations editor for National Mortgage News. The views expressed are his own.