March 15, 2021

Toomey Outlines Housing Finance Reform Principles

Signals willingness to work with Congressional Dems & Admin

Washington, D.C. – U.S. Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) today released a set of guiding principles for housing finance reform. In his proposal, Senator Toomey set the framework for legislation to end the government sponsored enterprise (GSE) duopoly and foster a liquid secondary mortgage market while protecting taxpayers and promoting equitable access for all lenders.


“The housing finance system remains in urgent need of reform,” said Ranking Member Toomey. “The current system exposes taxpayers to risk of future bailouts, fosters excessive risk taking, and crowds out private capital. I hope my colleagues, the administration, and all interested stakeholders will join me in working to implement these responsible reforms to prevent yet another financial crisis.”


Ranking Member Toomey’s principles call on Congress to enact housing finance reform legislation to:

  • Transition the GSE duopoly toward a competitive secondary market;
  • End the conservatorships of Fannie Mae and Freddie Mac;
  • Establish a level playing field for other sources of private capital that bear mortgage credit risk;
  • Foster a liquid secondary mortgage market that promotes the continued availability of affordable 30-year and other long-term fixed-rate mortgage loans across the United States and throughout the economic cycle;
  • Protect taxpayers by ensuring that significant first-loss private capital stands in front of any government support and that taxpayers are appropriately compensated for that support;
  • Promote equitable access to the secondary mortgage market by mortgage lenders of all sizes, business models, charter types, and locations; and
  • Provide for a smooth transition to the reformed housing finance system by ensuring that reforms are incremental and realistic, leveraging the existing regulatory and market structure.


Ranking Member Toomey’s principles are consistent with many previous housing finance reform proposals, including the U.S. Department of the Treasury’s Housing Reform Plan released in September 2019 and former Senate Banking Committee Chairman Mike Crapo’s (R-Idaho) outline released in February 2019.


On Tuesday, March 16, 2021 at 2:00 PM, the Senate Banking Committee will hold a virtual hearing titled, ‘Home = Life: The State of Housing in America,’ where a robust discussion on the issue of housing finance reform is expected.

###