17 Aug 11 Obama Warming to Idea of Helping Mortgage Giants Fannie and Freddie
Fox News reported that one of the options would be to restructure Freddie Mac and Fannie Mae as public utilities managed by a government regulator. The second option being considered would be to eliminate the mortgage lenders role in the loan origination process and replace them with “successors that would have their mortgage securities guaranteed by the government in exchange for a fee.” A third option is to wind down the home financing giants and limit government’s role in insuring loans to other agencies.
Not surprisingly, the White House would not commit to any specific plan as Obama continued his bus tour. According to White House spokesman Jay Carney, “It is simply untrue that the administration has settled on a single proposal for the longer-term structure of the home financing market.” Carney stated, “The article in question mischaracterizes a lot of the core housing and finance principles that the administration laid out in its February report to Congress.”
Deputy Treasury Secretary Neil Wolin also issued a statement saying that the three options outlined in the report to Congress allow for the government’s “footprint in the housing finance market” to “shrink substantially.” Wolin continued, “For now, Fannie Mae and Freddie Mac are playing a critical role in providing support to a still-fragile housing market and making mortgage credit available. However, in each of the three options, Fannie Mae and Freddie Mac will be wound down on a responsible timeline.”
Reader's Comments
Free Loan Quote
It is uncertain how these proposed changes would affect future mortgage rates. Currently, home loan rates are at historic lows, but how many people actually qualify for these loans? Home mortgage rates are some of the best rates they’ve ever been right now for borrowers. Now is a good time to borrow if you are in the market for a new home or to refinance.