The Obama Administration has released their report on the future of housing financing. While there are many parts to the report, some of the key points are as follows:
- Reduce the presence of Fannie and Freddie in the market place (9 out of 10 loans today go through them)
- Increase pricing at Fannie and Freddie
- Reduce the maximum loan cap that Fannie and Freddie can guarantee
- Greater down payments from borrowers (at least 10 percent)
- Increase annula mortgage insurance premium 25 basis points
The report also talks about working to fix flaws in the mortgage market and on better targeting affordable housing plans.
Some will applaud the goal of shifting the primary source for credit and responsibility for loses to the private sector. Others will scream at the though of costs and requirements going up at a time when it is already so difficult to obtain mortgage financing.
Their is also a potential that the mere threat of mortgage financing becoming even more difficult to obtain will spur buyers to buy while they still are able to qualify.
Where are you on this issue? Do you support the goal of reducing the governments presence in the mortgage market place even if the costs and requirements to obtain mortgage financing goes up?