During testimony before the House Financial Services Committee, Edward J. DeMarco, acting director of the Federal Housing Finance Agency, raised concerns about the Obama Administration’s approach to housing, questioning whether the government should continue to play a significant role in helping borrowers get home loans.
“Recently there has been a growing call for some form of explicit federal insurance to be a part of the housing finance system of the future,” DeMarco said. “The potential costs and risks associated with such a framework have not yet been fully explored.”
The The mortgage market has been effectively nationalized since September 2008, when the government seized Fannie and Freddie and bailed them out to prevent insolvency. Those two firms and the Federal Housing Administration are now insuring nine in 10 new home loans says the Washington Post.
Though the administration has yet to say explicitly how it wants to revamp housing policy, senior officials’ views have emerged in recent testimony and speeches.
The administration is slated to deliver a proposal by January on how to remake the housing finance system. A breakdown in that system helped cause the financial meltdown that sent the nation’s economy into recession.