In case you were looking for a short primer on the merits of the
Senate Banking Committee's contemplated overhaul of
America's mortgage-lending industry, the Johnson-Crapo bill,
you can find it in a recent headline. The April 17 Wall
Street Journal carries an Op-Ed piece authored by former Banking
Committee Chair Phil Graham and AEI Fellow, Peter Wallison. The
Journal's headline for Graham and Wallison's article
is Worse Than Fannie and Freddie.
Former Sen. Graham and Mr. Wallison claim that under
Johnson-Crapo, "housing financial reform is held hostage to
the political allocation of housing credit." They point out
that the revenue from the fees Johnson-Crapo imposes on mortgage
originations "will not be earmarked for subsidized mortgages
for low-income Americans. A significant amount will go to advocacy
groups that pressure lenders to make subprime loans, creating what
will almost certainly be the largest community-action slush fund in
American history."
