Obama Unveils Housing Reform As Market Continues To Recover
President Barack Obama stressed the importance of a new housing finance system that is sustainable with a core focus on principles that put private capital first and ending Fannie Mae and Freddie Mac’s “failed business model.” Obama’s proposed plan will also ensure broad access to the 30-year fixed rate mortgage, according to the White House.
The requests for housing reform come on the heels of good news for those who have struggled with mortgage delinquency. The national mortgage delinquency rate sunk to 4.09% in Q2 of this year, marking the third straight quarter of all-time highs in terms of delinquency improvement.
While some remain fearful that we are on the brink of another housing bubble, Obama assures that with proper execution, the US housing market has the potential to recover strong. “Fannie Mae and Freddie Mac should be wound down through a responsible transition, and the government role during normal times should be no bigger than necessary to achieve the principles laid out here,” official stated in the White House fact sheet.
The president also backs three proposals that help responsible homeowners refinance: to streamline refinancing for borrowers with government-insured mortgages, waive closing costs for borrowers who refinance into shorter terms, and expand eligibility for refinancing for those without government backed mortgage by creating special programs.
Obama also addressed the need to fix the “broken” immigration system in order to increase home values. Immigrants accounted for almost 40% of new homeowners nationwide from 2000 to 2010 and account for over 80% of the growth in homeowners in California.