Obama Spells Plans for Future of Housing Finance, FHA

President Obama laid plans Tuesday for the future of housing finance in the U.S., including the wind down of Fannie Mae and assistance for more refinancing options for American families. 

“Thanks to the grit and resilience of the American people, we’ve cleared away the rubble from the financial crisis, and begun to lay a new foundation for stronger, more durable economic growth,” Obama said in a speech delivered in Arizona. “But as any middle-class family will tell you, we’re not where we need to be yet.”

The President stated his support of winding down Fannie Mae and Freddie Mac. 

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“For too long, these companies were allowed to make big profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag. It was “heads we win, tails you lose.” And it was wrong,” President Obama said. “The good news is that there’s a bipartisan group of Senators working to end Fannie and Freddie as we know them.”

The plan also includes the return of private capital in the mortgage market as well as strengthening the Federal Housing Administration and preserving the 30-year fixed-rate mortgage. 

Housing industry participants applauded the efforts following the announcement with the Mortgage Bankers Association. 

“Of particular importance is the President’s insistence on transitioning the mortgage market toward a future state that will rely primarily on private capital, while at the same time ensuring sufficient liquidity and the availability of the affordable 30 year fixed rate mortgage, and mortgages that finance multifamily rental housing, in both good and bad times, through an appropriate use of a government guarantee,” said MBA President and CEO David Stevens. 

Homebuilders, too, stated support for the plans. 

“Among other reforms, the nation’s home builders also support strengthening the FHA to facilitate the flow of mortgage credit to qualified home buyers, cutting red tape and easing tight credit conditions that are preventing creditworthy borrowers from obtaining home loans, and supporting the Low Income Housing Tax Credit to ensure the availability of safe and affordable rental housing,” said National Association of Home Builders Chairman Rick Judson.

Written by Elizabeth Ecker

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  • “Thanks to the grit and resilience of the American people, we’ve cleared away the rubble from the financial crisis, and begun to lay a new foundation for stronger, more durable economic growth,” And if you believe that I have a bridge in Brooklyn to sell you!

  • I like Treverse’s ending statement, I think it tells it all. In short the presidents great plans for the future will take us back 12 or so years and repeat the same conditions that led up to the crash in 2008.

    He blames Wall Street and the securities markets for everything. What about the elimination of most of the Glass Steagal act signed away by Clinton in 1999.

    Look at what this did to fuel a false rise in economic growth and housing prices. Look at what occurred since 1999 right up to 2008. We had tremendous growth fueled by the greatest amount of debt ever held by the American people in the history of our country only to lead up to the largest economic and housing crash we ever had since the great depression!

    Anyone could borrow money on anything, as long as you were breathing! Credit cards were a dime a dozen. We had sub-prime loans, no income no asset loans, interest only loans, even loans that were 125% of the appraised value. Credit and underwriting guide lines were thrown out the window.

    Well my friends, if the President’s plans go through and I mean all his plans. This article, as good as it is does not cover all of what he wants to do, If all of his plans go through, we will be experiencing 1999 through 2008 all over again!

    John A. Smaldone

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