White House wants less gov’t in mortgage system
By Daniel Wagner and Derek Dravitz
The Obama administration wants to shrink the government’s role in the mortgage system — a proposal that would remake decades of federal policy aimed at getting Americans to buy homes and would probably make home loans more expensive across the board. The Treasury Department rolled out a plan Friday to slowly dissolve Fannie Mae and Freddie Mac, the government-sponsored programs that bought up mortgages to encourage more lending and required bailouts during the 2008 financial crisis. Exactly how far the government’s role in mortgages would be reduced was left to Congress to decide, but all three options the administration presented would create a housing finance system that relies far more on private money. “When the administration stops talking task forces and begins to flesh this out, you’ll see significant private capital injected into the mortgage market,” said Karen Shaw Petrou, who advises banks on government policy for Federal Financial Analytics.
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