An executive vice president and chief credit officer for Fannie Mae until the late 1980s, Edward Pinto has done groundbreaking research on the role of government housing policies in the lead-up to the financial crisis. In particular, his data have revealed striking facts about the contributions of housing policy to the mortgage crisis. Two of his major research papers have been submitted to the Financial Crisis Inquiry Commission: "Government Housing Policies in the Lead-up to the Financial Crisis: A Forensic Study" and "Triggers of the Financial Crisis." At AEI Mr. Pinto is continuing his work on the role of housing policies in the financial crisis and researching policy considerations and options for rebuilding our housing-finance sector.
President and CEO, Courtesy Settlement Services LLC, 1994-present
Consultant to the Housing-Finance Industry, 1989-present
President and CEO, ICBA (Independent Community Bankers of America) SmartLender LLC, 2004-2010
Executive Vice President and Chief Credit Officer, 1987-89; Senior Vice President, Marketing and Product Management, 1985-87; Vice President, Negotiated Transactions, 1984-85, Fannie Mae
In another example of the Federal Housing Administration’s (FHA’s) mission failure, the redefault rate after 12 months on government-guaranteed modifications (government mods) hovers around 40 percent for loans modified in 2010, 2011, and 2012. This is yet another example of the nightmare at FHA—policies that promote a cycle of failure for working-class families.
Congress should recognize that for the past 37 years the Federal Housing Administration has been the foreclosure leader, betraying its original mission of insuring sustainable loans to first-time and low-income borrowers.
The hedge-fund lobby proposes to “privatize” Fannie and Freddie by converting the US Treasury’s 79.99% preferred stock interest to common stock and eventually float the sale of the common with an initial public offering. The lure is a big budget payoff.
Any private financial institution that proposed to calculate its capital in the same manner as the FHA would be stripped of its charter before being escorted out of the room by its prudential regulator.