Obama Announces Steps Needed to Strengthen Housing

In an address last weekend, President Obama announced steps he will take to strengthen the nation’s housing market to create “a better bargain” for middle-class homeowners.

With the last four years marked by rising home prices and sales, improving construction starts and diminishing foreclosures, Obama urged that the time is now to build upon the recovery progress housing has shown. 

“As home prices rise, we have to turn the page on the bubble-and-bust mentality that created this mess, and build a housing system that’s rock-solid and rewards responsibility for generations to come,” Obama said. 

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Part of these efforts, he added, involve winding down Fannie Mae and Freddie Mac, to ensure that private capital plays a bigger role in the mortgage market. 

“Now we have to build on this progress,” he said. “Congress should give every American the chance to refinance at today’s low rates.”

Additionally, President Obama also urged helping more qualified families obtain a mortgage to buy their first homes, as well as ensuring that those who don’t want to buy a home have “decent, affordable places to rent.” 

In his address, Obama also called for preserving access to the 30-year fixed-rate mortgage, as well as encouraging the confirmation of Mel Watt to head the Federal Housing Finance Agency.

“No program or policy will solve all the problems in a multi-trillion dollar housing market, and it will take time to fully recover. But if we work together, we can make a home a source of pride and middle-class security once again,” he said. “And if Washington is willing to set aside politics and focus on what really matters, we can rebuild an economy where if you work hard, you can get ahead.”

View the Presidential address.

Written by Jason Oliva

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  • I have my doubts about the Presidents proposal. I am not saying that all parts of it are bad, on the contrary. However, to rely strictly on private sources to take the place of FNMA and Freddie Mac is not the way to go about it in my opinion.

    First off, FNMA and Freddie have been the largest source providing funds to seller servicers of loans in the market place. They have also provided the industry with underwriting guidelines and standards for the traditional mortgage industry for years.

    The private sources have not been able to provide those standards with any certainty. If we go strictly to private funds we will see rates rise above what they normally would be and continuity would be out the window.

    One other part of the Presidents proposal is dangerous, the proposal for first time home buyers. If you will pick up the transcript of the Presidents complete proposal you will find that he will be providing credit under very loose guidelines. Easy borrowing, crazy loan programs and lax underwriting guidelines is what led up to the 2008 crash. We wound up with an inflated economy created by more debt in the hands of the American people in any time in the history of our country!

    I am not saying we don’t need more private funds in the secondary, we do. For reverse mortgage product we need the proprietary loans back in the picture in a big way. We need more private money to buy MBS’s. And I am not saying we do not need to manage FNMA and Freddie differently, we do, but not the way our President is proposing to do it!

    I realize many would disagree with my theory and opinion, especially the home building industry but if like I said earlier, get the transcript of the speech and read it thoroughly as well as reading behind the lines, then you make your decission?

    John A. Smaldone

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