Clear nonpartisan analysis of fiscal and tax policy enables policymakers and the public to weigh competing theories on how to end the country’s economic crisis. Urban Institute researchers evaluated key components of the stimulus package and analyzed the tax proposals in the president’s budget. Warning decisionmakers about the unsustainable fiscal course ahead, our experts propose ways to control deficits and reform the entitlement programs that drive up spending. Read more.
This brief considers how Social Security’s many benefit and tax features have redistributed across groups over time. Using Current Population Survey data from 1970 through 1994 and microsimulation projections from the Urban Institute’s DYNASIM3 model, we find that for many decades, Social Security redistributed from blacks, Hispanics, and other people of color, to whites. These transfers will likely to continue in future decades. Our findings suggest that future reforms that place the burden of Social Security reform solely on younger, more diverse generations may have undesired distributional consequences if the aim of the program is to provide greater relative protections to more vulnerable groups.
The Strengthening Communities Fund (SCF) authorized under the American Recovery and Reinvestment Act of 2009 (ARRA) was part of the Federal government’s response to the recession. Because people often turn to nonprofit organizations for assistance in difficult financial times, SCF was designed to build organizational capacity of faith-based and community organizations (FBCOs) so they could better serve people in need and contribute to the economic recovery. SCF helped create and retain jobs for SCF grantees and FBCOs that delivered ARRA-related services. It also enabled FBCOs to provide information about ARRA benefits. SCF offers lessons to help shape future capacity-building programs.
An important component of the Strengthening Communities Fund (SCF) authorized under the American Recovery and Reinvestment Act of 2009 (ARRA) was to help faith-based and community organizations (FBCOs) build partnerships and collaborations with other stakeholders. This brief highlights the experiences of SCF grantees and the FBCOs that received their assistance and discusses lessons learned in promoting partnerships and collaborations in local communities. For example, partnerships need to be nurtured and promoted. Technology and social media can sometimes connect FBCOs. It is unclear, however, if the progress made in promoting partnerships under SCF can be sustained now that SCF has ended.
GSE credit has become very tight, with a significant increase in the average credit score of approved loans. How Fannie Mae and Freddie Mac are enforcing their Representations and Warranties (Reps and Warrants) rights is playing a significant role in this phenomenon. In this paper, we use the recently released Freddie Mac and Fannie Mae loan level credit data and find that put-backs are having an outsized chilling effect on lower FICO/higher LTV loans.
Over the past eight months, a broad consensus has been emerging on the future of housing finance. Under several plans, private-sector entities would continue to originate and service mortgages, with other private-sector entities providing credit enhancement for mortgage-backed securities. A public entity would be the guarantor of last resort, absorbing catastrophic risk. Collateral composition, house price experience, and diversification significantly affect credit risk, and thus the capital requirements. If capital requirements are too low, the government guarantee will be invoked too often; if they are too high, banks will shift the ultimate risk of their lower-quality loans to the government.
At A Glance is the signature monthly publication of the Housing Finance Policy Center. It is designed as a single reference for mortgage market data, through a public policy lens. Drawing from a range of sources that are often difficult to access and interpret, At A Glance contains key measures of housing affordability, credit availability, and other topics related to the government role in the mortgage market. The authors compile and illustrate this critical information in a comprehensive and easily digestible format so that stakeholders across the housing finance sphere—government, advocacy, academia, and private markets—can contribute to data-driven policy debates. Highlights of the October issue include the GSE portfolio wind-down, tapering HAMP and HARP activity, and housing affordability by MSA.
Richmond, CA, has taken steps to become the first city in the nation to vote to use its powers of eminent domain to seize underwater loans and, the city argues, prevent foreclosures and neighborhood blight. We look at several cities that have considered this controversial strategy, evaluating what they have in common, and whether the plan, as proposed, will address the problems they face.
On August 22, the six regulatory agencies proposed rules for risk retention under Section 941 of the Dodd Frank Act. In this comment letter, we focused on one aspect of the proposal, the Qualified Residential Mortgage (QRM) definition for residential mortgage backed securities.
Low and moderate-income mortgage borrowers, and borrowers of color, withdrew from the market disproportionately during the Great Recession and have not returned, even as total lending activity has begun to recover. While these potential borrowers are applying for loans in increasing numbers, their denial rates have increased since 2009. This shift is especially surprising since communities of color, particularly Hispanics, continue to increase their share of the population. While housing finance policy cannot target the central factors driving these disparities, it should avoid creating barriers to obtaining mortgage credit for qualified borrowers and the financial benefits of homeownership.
The United States is starting down the road of third-world budgeting practices in a fiscal mess of its own making, warned Institute fellow Rudolph Penner in this commentary for CNNMoney.com before the debt-ceiling debacle.