In this report, we continue our assessment of GSE-reform studies with policy impact. With the Senate Banking Committee set now on a path to legislation, studies are coming fast and furious. A new one from Michael Bright (former senior staffer for Sen. Corker) and Ed DeMarco (former FHFA head) under the auspices of the Milken Institute finds that inefficiencies in the U.S. housing finance system particularly with regard to underwriting and in the rental market have a negative impact on housing access and affordability. The study concludes that the secondary mortgage market should be reformed to require that participating firms have a duty to serve the entire marketplace and to better direct housing subsidies to marginal borrowers.
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