Here comes the second leg down in housing

[jtabeb]

NO credit, prices go DOWN.

http://www.washingtonpost.com/wp-dyn...T2011021102202

The Obama administration wants to raise fees for borrowers and require larger down payments for home loans as part of a long-term effort to restructure the nation's housing market. But it warned that these measures could boost mortgage rates and make it harder for home buyers to secure the 30-year fixed-rate mortgage, a mainstay of American home buying for decades

In a long-awaited white paper, the administration said it intends to wind down the federal mortgage giants Fannie Mae and Freddie Mac and curtail the Federal Housing Administration to help reduce the government's outsized role in mortgage funding.

The housing finance system, which has ensured that Americans can get home loans, came crashing down in the financial crisis, helping fuel millions of foreclosures and the recession.

"I think it's absolutely the case that the U.S. government provided too much support for housing, too strong incentives for investment in housing," Treasury Secretary Timothy F. Geithner said Friday during a speech at the Brookings Institution. He noted that in addition to those fundamental mistakes, the government "allowed a huge amount of basic mortgage business to shift where there was no regulation or oversight."

[Milton Kuo]

Re: Here comes the second leg down in housing

Until the Obama administration takes meaningful action to get the government out of financing houses, this is just talk. Given Obama's disappointing track record so far, I'm pessimistic that anything good will happen that will actually benefit the financially responsible.

Also, even if the Obama administration does get serious about housing finance reform, when will it come into effect and how long to fully implement? If housing prices are allowed to fall further in the next year or two, it will trigger another cardiac arrest in many of the banks unless they've found someone to whom they can unload all the junk paper.

[zoog]

Re: Here comes the second leg down in housing

...In a long-awaited white paper, the administration said it intends to wind down the federal mortgage giants Fannie Mae and Freddie Mac and curtail the Federal Housing Administration to help reduce the government's outsized role in mortgage funding...

Wow, that's a pretty bold claim. But...

Until the Obama administration takes meaningful action to get the government out of financing houses, this is just talk...

Also I love that now, long after the damage was done, Turbo Timmy casually admits that government policies helped fuel the housing bubble.

[don]

Re: Here comes the second leg down in housing

2nd leg my ass. Without the government's props, like the tax credit, the housing crash would be much further along and that much closer to reaching bottom. NAR Fears Double Dip in Housing ... blah, blah, blah. Not to mention Shadow Inventory. Have the banks received enough public largess to let it out into the sunlight? Any pronouncement by the empty suit in the WH should be read like chicken entrails, indicating where banksters might be roaming at this stage of their fandango.

[vinoveri]

Re: Here comes the second leg down in housing

NO credit, prices go DOWN.

http://www.washingtonpost.com/wp-dyn...T2011021102202

The Obama administration wants to raise fees for borrowers and require larger down payments for home loans as part of a long-term effort to restructure the nation's housing market. But it warned that these measures could boost mortgage rates and make it harder for home buyers to secure the 30-year fixed-rate mortgage, a mainstay of American home buying for decades

In a long-awaited white paper, the administration said it intends to wind down the federal mortgage giants Fannie Mae and Freddie Mac and curtail the Federal Housing Administration to help reduce the government's outsized role in mortgage funding.

The housing finance system, which has ensured that Americans can get home loans, came crashing down in the financial crisis, helping fuel millions of foreclosures and the recession.

"I think it's absolutely the case that the U.S. government provided too much support for housing, too strong incentives for investment in housing," Treasury Secretary Timothy F. Geithner said Friday during a speech at the Brookings Institution. He noted that in addition to those fundamental mistakes, the government "allowed a huge amount of basic mortgage business to shift where there was no regulation or oversight."

Forget about it .... at most this is a plan to reshuffle the chips ...

The report offers three options for replacing Fannie and Freddie. They include creating a new government agency that would continue to insure mortgages or a new agency that would step in only during times of crisis. Each, however, could put taxpayers at more risk of having to bail out the mortgage market during big declines.
The most drastic option would end government backing for home loans beyond the FHA. But the administration warned that this measure could affect access to credit for many potential homeowners. It could boost mortgage rates the most, the officials said, and it could make it harder for community banks to compete in the housing market.

[c1ue]

Re: Here comes the second leg down in housing

All talk.

Until I see action and results, Obama is just a sock puppet, albeit a very articulate one.