Document Type

Article

Comments

This comment letter predates the author's affiliation with Cornell Law School.

Abstract

The PLS market, like all markets, cycles from greed to fear, from boom to bust. The mortgage market is still in the fear part of the cycle and recent government interventions in it have, undoubtedly, added to that fear. In recent days, there has been a lot of industry pushback against the government’s approach, including threats to pull out of various sectors. But the government should not chart its course based on today’s news reports. Rather, it should identify fundamentals and stick to them. In particular, its regulatory approach should reflect an attempt to align incentives of market actors with government policies regarding appropriate underwriting and sustainable access to credit. The market will adapt to these constraints. These constraints should then help the market remain healthy throughout the entire business cycle.

Date of Authorship for this Version

8-8-2014

Keywords

Private Label Securities, Federal Housing Finance Agency, housing finance, mortgage market, affordable housing, first-time homebuyers, Community Reinvestment Act, Fair Housing Act, Qualified Mortgage, Qualified Residential Mortgage, Consumer Financial Protection Bureau, Federal Housing Administration

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