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Washington, D.C. –UNC Center for Community Capital executive director Janneke Ratcliffe told a U.S. House of Representatives subcommittee at a hearing May 11 that risk retention and investor information are part of the solution to restoring confidence in the housing sector, along with ensuring that borrowers have access to sound, well-underwritten loans.

“Restoring confidence in the mortgage market will require greater transparency and accountability,” Ratcliffe told members of the Subcommittee on TARP, Financial Services, and Bailouts of Public and Private Programs at its hearing on transparency as an alternative to risk retention.

“However, the ultimate impact of these measures is highly dependent on the form that the mortgage secondary market takes,” she said. “As you move forward in this complex process, it is important to bring private capital back and to protect the taxpayer, but it is also important to restore the financial system so that it works better for the American households who rely on it for economic security.”

Transparency and risk retention, while essential, are not sufficient to return the market to long-term vibrancy and resilience. Ultimately, Ratcliffe said, a new housing finance system must also provide for:

  • Broad and constant liquidity to fund an $11 trillion market.
  • Mechanisms that limit volatility.
  • Access to affordable and sustainable financing for homeownership and rental housing, including for underserved segments
  • Preservation of the 30-year, fixed-rate mortgage, which provides economic stability at the household and macro-economic levels.

View the testimony.

Mortgage finance is a major area of focus for the Center for Community Capital, the leading center for research and policy analysis on the transformative power of capital on households and communities in the United States. The center is part of the College of Arts and Sciences at the University of North Carolina at Chapel Hill. Its in-depth analyses help policymakers, advocates and the private sector find sustainable ways to expand economic opportunity to more people, more effectively. For more information, visit or call (919) 843-2140.

Topics(s): Affordable Homeownership, Default, Bankruptcy, & Foreclosure, Housing Policy, Mortgage Finance, Other, Testimony
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