Vote #2 on the Eutopian Federal Mortgage Guarantee Corporation Establishment Act

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Eutopian Federal Mortgage Guarantee Corporation Establishment Act ("EFMGCEA")

Whereas, higher percentages of home ownership are positively correlated with better standards of living, and increasing percentages of home ownership are positively correlated with economic growth, and

Whereas, since the privatization of RECOM, and the subsequent virtual elimination of the public debt of the United Provinces of Eutopia, there has been a shortage of the highest quality locally issued debt relative to investor demands, which has tended to lead to investment in other markets, most notably the United States, which could be filled by guaranteed local mortgage backed securities, and

Whereas, the lack of an organized process of mortgage securitization has led to higher mortgage rates for current and potential homeowners in the UPE, thus acting as a disincentive to home ownership, and

Whereas, in other countries, standardization and securitization of mortgages has led to lower mortgage rates and increased home ownership percentages, be it therefore

Resolved, that the Eutopian Federal Mortgage Guarantee Corporation is hereby established as government chartered corporation, under the portfolio of the Minister of Finance with 0.1% of the budget allocated to start up expenses, to be reimbursed out of future profits, and be it further

Resolved, that said corporation is hereby authorized to sell non-voting preferred stock to banks and other financial institutions, and is authorized to borrow in bond or debt markets for up to 12.5 times the amount of its net capital, and be it further

Resolved, that the sole business of the said corporation is to guarantee the timely payment of principal and interest on securities backed by pools of mortgages on one to four family owner occupied principal residences located within the boundaries of the United Provinces of Eutopia, where the amount of the mortgage at time of securitization is not more than twice the median house price in United Provinces of Eutopia, and be it further

Resolved, that said corporation shall charge a guarantee fee sufficient to cover expected losses and provide a fair return to its investors after tax, and be it further

Resolved, that said corporation shall be entitled to set mortgage underwriting standards, including, but not limited to, loan to value ratios, minimum down payments, and income to debt service percentages for the mortgages it is willing to guarantee, and be it further

Resolved, the federal anti-discrimination regulations will apply to the Eutopian Federal Mortgage Guarantee Corporation.

Voting will conclude in 48 hours.

 

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Aye

 

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Da.

 

[HJ Tulp]

No.

 

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Da.

 

[Estonianzulu]

Voting on this Bill is Closed.

 

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(OOC: That took its time...)

 

[The_Hawk]

"Point of order, Per Speaker," protests one backbencher. "This vote was conducted before the last election, and thus reflects the Assembly's breakdown at that time. We cannot finish it under our current breakdown and expect that it will adequately represent the nature of the Assembly when it was first considered. We must hold a new vote!"