Sen. Crapo: “We don’t need Fannie & Freddie”

Sen. Mike Crapo met with the Eastern Idaho Mortgage Lenders Association to take questions about new housing legislation.

As ranking member of the Banking, Housing, and Urban Affairs committee, Crapo worked with committee chairman and Democrat Tim Johnson to introduce the Housing reform bill. Lawmakers’ goals are to do away Fannie Mae and Freddie Mac, eventually putting authority back into the private sector. The bill should also require those looking to purchase a home to put up 20 percent toward a mortgage, unless buyers work through organizations like the Federal Housing Administration.

“It doesn’t help anybody for someone to be put into a mortgage that they have to fail on,” said Crapo. “Either they need to have a different kind of mortgage, make a different kind of purchase or maybe they need to wait for a little while and save up some of their money in order to give a larger down payment.”

Lawmakers said it is important for people to remember the market crash in 2006 and learn from those mistakes. Lawmakers said they conducted a stress test on Fannie Mae and Freddie Mac, finding that although the entity is doing better than ever, there are concerns that history could repeat itself.