Clifford Rossi

The Corker-Warner bill would require private investors to take 10% of losses before federal mortgage guarantees kick in. More research is needed to determine whether that’s enough protection for taxpayers.

In addition to addressing the risks that caused the last crisis, the Financial Stability Oversight Council should be comparing notes about cyber threats with the national security agencies.

As the government banishes home loan products deemed unsuitable for most borrowers, why does it continue to backstop one that’s pitched to aging seniors – mainly by nonbank lenders?

The U.K. Help to Buy guarantee program provides a good example of how a private-public risk-sharing arrangement could be structured among mortgage insurers, lenders and the government.

For all their analytic complexity, the Basel capital standards simplemindedly view each type of risk in isolation. In reality, an increase in one type of risk may lower another.

A modified version of Ed DeMarco’s securities-based model for housing finance reform could promote an active market for risk-sharing arrangements and further reduce systemic risk by distributing credit risk broadly.

Accounting rules require banks to drain reserves when loan losses are low and build them up when problems abound, amplifying booms and busts. Allowing a long-run view of losses in setting reserves would improve financial stability.

A system where ratings are assigned to a nationally recognized statistical ratings organization by an independent public utility offers the best shot at avoiding another secondary mortgage market meltdown.

Spending several million dollars to beef up risk management processes would be an easy decision if it saved hundreds of millions in deposit assessments each year. Also, Camels should become Carmels.

The riskiest loans get priced out of Fannie and Freddie securities and end up guaranteed by the FHA. We are merely shifting risk from one set of federally insured entities to another.

Restricting the use of Fannie Mae and Freddie Mac securities in computing the LCR may raise mortgage costs and negatively impact banks' ability to manage liquidity risk.

Tough regulations, strict oversight and sophisticated analytics can all help, but they pale in comparison to a culture that actively embraces risk management rather than paying lip service to it.

Private mortgage insurance and "senior-sub" securitization structures have advantages that could accelerate private capital's return to the mortgage market, despite the lumps they took during the crisis.

Take the Federal Housing Administration out of HUD and put it under a commission. A self-funded, independent government corporation would be a major step toward comprehensive housing finance reform.

Regulators seem obsessed with preventing false negatives: loans that pass underwriting and then default. They should consider the costs of false positives, i.e., restricting loans that probably would perform fine.

Future compensation structures should not only reflect the higher costs of servicing troubled loans but also open the business to more nonbank competitors.

Real GSE reform could take years. That's too bad, but in the meantime, the FHFA can start to redesign the securitization process – and phase out redundancies between Fannie and Freddie.

The CFPB's final Qualified Mortgage rule exacerbates our dependence on the GSEs and FHA, potentially harms a large swath of potential borrowers and severely handicaps the market’s ability to effectively serve customers.

Securitization is essentially a financial production factory. Consistency in the manufacturing process, which minimizes defects and hence promotes investor interest in the product, would allow the business to prosper again.

The FHA in its current form could not handle an emergency backstop role but would have a much better chance if moved out of HUD and combined with Ginnie Mae and the remnants of Fannie and Freddie.