Obama Housing Policy

After a summer news cycle defined by scandals, privacy outrage, and diplomacy flares, it looks like the White House is steering its focus towards much more domestic problems. Regardless of whatever convoluted or heavy-handed exchanges occur within the halls of power, the overwhelming amount of what’s poured out of Capitol Hill and the U.S. security community has done little to impact Americans in the immediate. Last Tuesday, President Obama announced a  series of policy plans for the housing market, the overwhelming amount of which are focuses on recovery sustainment and debt reduction.

As summarized by the Washington Post, the President’s intentions can be boiled down to a series of policy goals. In line with President Obama’s more Keynesian leanings, many of his proposals are aimed at relieving fiscal strain for lower-income Americans and reducing debt burden on more financial distressed communities. One particularly pointed area of his housing plan centers on taxing securities held by major financial institutions. In theory, holding financial institutions responsible for paying a small assessment on mortgage-backed securities will motivate greater responsibilities.

Additionally, the President announced plans to continue providing direct Federal loans through both the Federal Housing Administration and the Department of Veteran Affairs. Veterans and low-income earners alike will remain eligible for government-backed mortgages, and the President’s attentiveness to responsible lending is intended to overlap with the sustaining of loans to demographics seen as more typically in need.

However, as an adjunct to these announcements around continuing veteran and low-income housing benefits, Obama made clear plans to disassemble Freddie Mac and Fannie Mae by the close of his term. In line with both Republican and general Bipartisan consensus, the President seems uncomfortable with the dual loan entities’ continued conservatorship. Phasing their loan responsibilities back into the …read more