"Let’s get the government back out of housing” the cry goes. Like when? The government has dominated housing policy since World War II and mortgage finance for 40 years.
“Conventional wisdom” says that housing finance needs to be reformed to bring back private capital, and push out the government and government-sponsored enterprises. I favor pragmatism over conventional wisdom, and therefore believe that government guaranteed mortgage backed securities and a strong GSE are not only “good” but necessary. They are good for the middle and lower classes, housing and the economy. And they don’t require a massive taxpayer liability.