The Department of Labor has concluded hearings on a plan that could transfer billions of dollars from private pension funds to the ailing housing industry.
At issue is a proposal, initiated last May, that would permit private pension funds to the ailing housing industry.
At issue is a proposal, initiated last May, that would permit private pension and welfare funds to be invested in pooled real estate mortgages.
Mortgage experts say that each $1 billion could mean 80,000 new homes; it is presently estimated that private pension funds currently have a total of three-fourths of a trillion dollars in resources.
The Labor Department panel heard testimony from representatives of the mortgage-lending industry who, while supporting the general proposal, objected to some of the terms.
The primary objections centered around three proposed restrictions, namely that the mortgage pool sponser provide safeguards against loan defaults; that the pool trustees be independent of the pool sponsor and that the pool certificates be sold in a public offering.
The lenders maintained that mortgage-backed securities cannot be made entirely free of risk, saying that some pool sponsors must be affiliated with pool trustees and that public offerings are for more costly than private placements. They require too much marketing time to be successful in a volatile investment climate, the lenders said.
The Labor Department panel is working on a final pension fund proposal. No timetable has been set for a decision but several witnesses urged prompt action.