The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) marked both the culmination of a 20-year period of changes in the U.S. housing finance system and the beginning of a period of legislative reforms intended to forestall any recurrence of the savings-and-loan industry debacle that forced the enactment of FIRREA. John C. Weicher describes the process of change in the housing finance system and its implications for the ability of the system to fulfill the purposes for which it was established. The new system is dominated by two large national institutions, chartered by the federal government and serving the secondary mortgage market, instead of thousands of small, local lenders who both make mortgage loans and hold them in portfolios. Legislation of the last five years has imposed higher capital requirements on nearly every institution involved with housing finance and changed the regulatory structure for every private institution in the system. In addition, these changes have created potential conflicts with the stated public objectives of the system: access to home mortgage funds for areas and groups that are “underserved” and support for the mortgage market during economic downturns.