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Obama Proposes Fixes For the Housing Market, Ending Fannie and Freddie

by Shilpi Paul

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In a speech to a Phoenix crowd on Tuesday afternoon, President Obama laid out a few ideas on how to strengthen the housing market, and called for reforming the company’s two mortgage giants.

During his speech, Obama placed the blame for the housing crisis in several places. “You had reckless lenders who sold loans to people they knew couldn’t afford them,” said the President. “And let’s face it, we also had some reckless buyers who knew they couldn’t afford them and still took out loans.”

Obama also highlighted the current attempt by a bipartisan group of senators to reform Fannie Mae and Freddie Mac. “For too long, these companies were allowed to make huge profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag,” he noted. “It was ‘heads we win, tails you lose.’ And it was wrong.”

“I believe that our housing system should operate where there’s a limited government role and private lending should be the backbone of the housing market,” he continued.

In regards to actionable steps, Obama proposed five ideas, several of which will require Congressional action. They are:

1. To make ownership more affordable, Congress should pass a bill to let homeowners refinance at today’s low rates.

2. Help more potential homeowners obtain mortgages. “[Secretary of HUD] Shaun Donovan has been working with the finance industry to make sure we’re simplifying overlapping regulations; we’re cutting red tape for responsible families who want to get a mortgage but keep getting rejected by the banks,” noted Obama.

3. Bring immigrants into the fold by “fixing the broken immigration system.” This way, said Obama, there will be more people to buy homes, bring up the health of the housing market. He expressed support for an immigration bill from John McCain and Jeff Flake that has also passed through the Senate.

4. Pay special attention to areas that were hit the hardest by the housing crisis and are taking the longest to recover, and encourage health by rebuilding homes. “Let’s put construction workers back to work repairing rundown homes, tearing down vacant properties so that the value of homes in those surrounding areas start picking up,” said Obama.

5. Support affordable and quality rentals. Obama acknowledged that not everyone is ready to, or should, buy a home. For those who must rent, Obama encouraged investing in affordable housing:“Let’s bring together cities and states to address local barriers that drive up rents for working families.”

Obama followed up on Tuesday’s housing speech by taking questions on the topic, via Twitter, Facebook, YouTube, Instagram or Vine, Wednesday at 1pm.

For the full text of the speech, click here.

See other articles related to: obama

This article originally published at http://dc.urbanturf.com/articles/blog/obama_proposes_fixes_for_the_housing_market/7425

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