FDIC Chairman Sheila C. Bair Delivers Speech to the Wharton School, University of Pennsylvania International Housing Finance Program
Jun 25, 2010
On Friday, June 18, 2010, Federal Deposit Insurance Corporation (FDIC) Chairman Sheila C. Bair spoke to the Wharton School at the University of Pennsylvania regarding the current state of housing and homeownership. Chairman Blair advocated “a return to the fundamentals” of mortgage lending and securitization to create a more rational world where consumers are protected, risks are contained, and scarce resources are allocated to their highest and best use.
With regard to underwriting standards, Chairman Bair made clear that she strongly believes in mandating sizeable down payments, solid borrower credit histories, proper income documentation, and sufficient income to make regular payments at the fully-indexed rate of the loan, i.e., strong mortgage lending practices. Chairman Bair also touched upon the role of capital markets, flaws in private securitization structures, the need to restore confidence in U.S. mortgage finance, government sponsored enterprise (GSE) mortgage reform, and the restoration of balance to housing policy and the economy.
Chairman Bair’s complete speech may be found here.