The Senate Banking Committee on October 20 held a hearing to discuss the possibility of, and the need for, the continuation of the 30-year fixed-rate mortgage as the primary financial structure to back the future U.S. housing finance market.

Committee Chairman Tim Johnson (D-SD) began the hearing with a statement in which he explained that a full overhaul of the nation’s housing finance system will not occur in the near future. Specifically, Senator Johnson said he expected the Committee’s schedule and work-flow will prevent it from introducing a comprehensive piece of housing finance legislation for at least a year.

The panel of witnesses at the hearing included industry stakeholder and President and CEO of  Affinity Federal Credit Union John Fenton, testifying on behalf of the National Association of Federal Credit Unions;  housing policy expert and Senior Policy Analyst at the National Council of La Raza Janis Bowdler; Professor of Finance at the George Mason School of Management Dr. Anthony Sanders; and economic policy gurus Dr. Paul Willen, Senior Economist and Policy Advisor at the Federal Reserve Bank of Boston, and Dr. Susan Woodward, President of Sand Hill Econometrics.

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According to an article in today’s Washington Post, the much discussed proposal to require home-buyers make 20% down-payments in order receive the lowest interest rates has stalled:

Half a year has passed since then, so here’s an update: The 20-percent proposal is still alive, but it’s temporarily bogged down in agency reviews of the roughly 12,000 comments filed by interest groups and individuals. It almost certainly would not be ready for adoption until the first quarter of 2012. Even then, there would be a mandatory one-year lag before the requirement could take effect, pushing the issue into 2013 — well after the presidential and congressional elections.

So, how challenging is the political climate for a bill such as this…

According to the post, very. Prognosis for passage, poor:

Bottom line: Don’t expect to see a 20-percent rule in the near future. Even independent regulators don’t operate in political vacuums. They’ve either gotten the message already or they will soon.