Big Names Weigh In On Mortgage Reform
A panel of experts on the mortgage industry have written to Timothy Geithner and Ben Bernanke demanding reform.
With housing finance still in disrepair and little activity in the way of newly issued, private residential mortgage securities, a panel of economists, former regulators and other mortgage industry experts are calling for national loan servicing standards that they say would promote and accelerate a market recovery.
More than 50 co-signers took this position in a letter addressed just before Christmas to Treasury secretary Timothy Geithner, Federal Reserve Board chairman Ben Bernanke and the heads of the Federal Deposit Insurance Corp, Federal Housing Finance Agency, Office of the Comptroller of the Currency and Securities and Exchange Commission. The letter asserted that new securitization standards should be adopted now to address the misaligned incentives and tranche warfare issues that have bedeviled mortgage servicing throughout this crisis. One of the signers is investment banker, risk management adviser and co-founder of Institutional Risk Analytics R. Christopher Whalen, who organized the effort and posted the letter on his Web site. Whalen was joined, among others, by Brookings Institution guest scholar, housing policy expert and journalist Martin Mayer; former Federal Housing Finance Board chairman Allan Mendelowitz; prominent and often outspoken economists James Galbraith of the University of Texas; Nouriel Roubini of New York University; former Federal Reserve and FDIC official Robert Eisenbeis, now chief monetary economist of Sarasota, Florida-based Cumberland Advisors; University of Maryland Law School professor Michael Greenberger, formerly of the Commodity Futures Trading Commission and Justice Department; and affordable housing advocate Harold Simon, executive director of the National Housing Institute. ....