Although the Obama Administration has supported a reduced role for the government in supporting the housing market, it still backs 90 percent of newly issued mortgages - "more than ever before." A new report examines the prospect of a withdrawal.
As Floyd Norris reports, the prospect for a federal government withdrawal from the mortgage market is facing long odds.
“'For the foreseeable future, there is simply not enough capacity on the balance sheets of U.S. banks to allow a reliance on depository institutions as the sole source of liquidity for the mortgage market,' stated a report on the American housing market this week, issued by a group that was filled with members of the housing establishment."
“Given the size of the market and capital constraints on lenders, the secondary market for mortgage-backed securities must continue to play a critical role in providing mortgage liquidity,” added the report, issued by a housing commission formed by the Bipartisan Policy Center, a group that was begun by former Senate majority leaders from both parties. The group thinks investors will not be willing to finance enough mortgages — particularly 30-year fixed-rate loans — without a government guarantee."
"In the end," concludes Norris, "we can have a government-dominated mortgage system, with the risks inherent in that — risks that we saw in the need to bail out Fannie and Freddie. Or we can abandon the 30-year fixed-rate mortgage, leaving homeowners at risk when rates rise, as they are in much of the world. But it is hard to see how we can have it both ways."
FULL STORY: Easing U.S., Slowly, Out of Home Financing

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Planetizen Federal Action Tracker
A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

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Community members, aided in part by funding from the city, repurposed a vehicle lane to create a protected bike and pedestrian path for the summer season.
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