In light of the rallying housing market sector, President Barack Obama is all for overhauling the mortgage finance system of the country, a move that includes shuttering down two government-supported mortgage giants, Fannie Mae and Freddie Mac. Obama has announced that taxpayers should henceforth never be left ‘holding the bag’ for bad bets placed by the mortgage giants.
Details of Obama’s Proposal
While at Phoenix, the president outlined his proposal for rebuilding the housing market. One of his plans is to substitute Fannie and Freddie with an arrangement that would put the private sector, rather than the government in jeopardy for giving loans. The idea is to still involve the government, but only as a loan guarantor and overseer. As a part of the plan, Obama is also looking for guarantees that the private sector through its loan finance system will ensure greater homeowner access.
However, Obama is aware that housing reforms introduced should rejuvenate the market in such a manner so that it does not just ‘re-inflate the housing bubble’.