Warren: Don’t ‘scapegoat’ affordable housing in reform push

Sen. Elizabeth Warren (D-Mass.) mounted a spirited defense of affordable housing goals on Tuesday as she laid out her vision for overhauling the housing market.

In her first public remarks on housing finance reform, Warren laid out her vision for overhauling the system after the subprime meltdown, and emphasized that Congress should ensure mortgages remain affordable across the middle class, calling it the “centerpiece of the American Dream.”

Appearing before the Mortgage Bankers Association, Warren said affordable housing goals, long pointed to by conservatives as a driving force in the creation of the risky mortgages that sunk the system, had nothing to do with the crisis — “not even a little bit.”

“Affordable housing goals have been scapegoated by those who have been itching to get rid of the goals for a long time, but I think it’s time to drop that red herring,” she said, according to prepared remarks.

Warren admitted that Fannie and Freddie made “significant mistakes” in the years leading up to the crisis, driven by a desire to drive up value for shareholders. But she said the bulk of the blame should lie at the feet of private mortgage originators, who began doling out risky mortgages and “making money hand-over-fist,” enticing Fannie and Freddie to begin bringing more and more risk into their portfolios.

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