The head of the International Monetary Fund on Thursday called for the U.S. government to enact widespread mortgage reform, urging that “the housing issue needs to be addressed forcefully and really steadily” to improve the U.S. economy.
“I’m not sufficiently deep into the technical details, but it’s a question of revisiting the mortgage terms and conditions, and it’s a question of making sure that the much-improved financing terms made available today are also made available to homeowners,” said IMF Managing Director Christine Lagarde on Bloomberg TV’s In Business.
Lagarde’s statements on Thursday expanded upon those she made last Thursday at a Brookings Institution event, during which she called for mortgage relief to help solve the housing crisis in the U.S., where the threat of foreclosure still squeezes homeowners even as foreclosure rates fall.
As recently as a Wednesday's House Financial Services Committee markup, Republicans tried to gut the Home Affordable Modification Program, the centerpiece of the Obama administration’s housing relief efforts, which critics say have fallen short of helping many homeowners.
“It's really not for me to comment on which political route [reform] should take,” Lagarde said. “Households are a key category of economic agents in the United States, so what can be done to help them go in the direction of renewing their mortgages on better terms, taking out new mortgages -- I think it's going to be of help to the entire U.S. economy.”
Lagarde also said that she’ll be looking for IMF member states to contribute more money to the fund to help prevent further deterioration of the global economy. She has already secured $320 billion to boost the IMF’s coffers, but said she has meetings planned with other nations before the end of the IMF’s spring conference with the World Bank to try to negotiate more funds.
“[$320 billion is] not the final ask. It’s a step in the way, and we’re certainly looking for a much more critical mass before the end of the week,” she said, adding that she has “currency commitments” from Japan, Nordic countries, and Switzerland, and that more would be announced on Thursday afternoon.