Obama's Speech On Free Markets For Housing Was A Complete Lie (He Wants MORE Government, Not Less)

Confounded Interest ^ | 08/09/2013 | Anthony B. Sanders

[whitedog57]

President Obama is in Phoenix today to discuss fixing the housing market. It is reminiscent of President Franklin D. Roosevelt’s speeches in the 1930 on how to fix the housing market. The federal government began its response to the housing crisis in 1932, with the enactment of the Federal Home Loan Bank Act (the Bank Act). The Bank Act created the Federal Home Loan Bank System and the Federal Home Loan Bank Board (FHLBank Board) as its regulator. The federal government also created the Home Owners’ Loan Corporation (HOLC), the Federal Housing Administration (FHA), and Fannie Mae. And the creation of the 30 year fixed-rate mortgage rather than the short-term balloon notes that were previously used.

Following in the path of FDR, Obama is suggesting a NEW Fannie Mae, the preservation of the 30 year fixed-rate mortgage, and expanding the credit box (aka, relaxing credit requirement for mortgages). And 5% down payment mortgages (which The Fed calls semi-prime).

But do we need everything Obama is pushing, such as more low down payment (but actuarially fair) mortgages? Like FHFA Director Ed DeMarco put into place (and may be replaced by Mel Watt)?

1) National homeownership rates are back to 1995 levels, a seemingly stable place to be. Notice that there was a Carter homeownership bubble that deflated as well.

nhown60s

2) Mortgage purchase applications are back to 1996 levels, another seemingly stable place to be.

mbapurch1996

So why do we need to expand the credit box? How about “Let sleeping dogs lie?”

shepsleep

3) In terms of touting the housing recovery, 7 out of 10 jobs created under President Obama have been part-time jobs. It is hard to have a HOUSEHOLD BASED housing recovery with a part-time labor force. This recovery is a foreign investor/hedge fund recovery.

3a) In addition, Obama said that immigration reform would improve the housing prices.

4) Obama wants to preserve the 30 year fixed-rate mortgage (created in the 1930s). Currently, the adjustable-rate mortgage is only at 5.8% market share. It seems like the fixed-rate mortgage seems to have survived.

armperc90

5) Obama raised concerns that the 30-year mortgage might disappear if Fannie Mae and Freddie Mac are closed because banks have been unwilling to lend for such a duration without a government guarantee. So The President wants an explicit guarantee to preserve the 30 year fixed-rate mortgage; the mortgage finance giants have helped ensure the availability of 30-year mortgages for generations.

But while Obama previously called for the closing of Fannie Mae and Freddie Mac, he is not suggesting a replacement, like Corker-Warner. Logically, this will require yet another government insurance program (like FDIC, FSLIC, Medicare, etc). But thus far, there are no safeguards in place that constrains the Corker-Warner approach from expanding lending for political reasons. So, this is a rebadging of FDR’s housing legislation.

6) President Obama will tout the success of the signature HAMP and HARP programs. But homeowners have redefaulted on the oldest HAMP permanent modifications at a rate of 46%. Odd sort of success.

7) At the same time, HUD Secretary Shaun Donovan is pushing racial quotas in neighborhoods. How is this consistent with moving the government out of the housing market?

An investor led housing recovery, thanks to The Fed’s low rate policies and declining 10 year Treasury rates, not government programs.

hp10cmt

Let’s see how the Afforable Healthcare Act (aka, Obamacare) impacts the housing market, particularly once it hits the iceberg.

Titanic-redo

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[whitedog57]

GROW government is his true agenda. Lying in front of a midyear election is the plan.

[forgotten man]

0bama is an economic illiterate. Everything he has ever touched in business and economics has turned to sh*t. He has the Mudas touch.

[Wuli]

there is nothing wrong in the private markets with the 30-year fixed-rate mortgage;

it often now does not remain in the hands of it’s orginal source of funds, is sold, often more than once during the 30 years, when its holder wants cash (at that time) rather than the revenue stream of the payments

the difference in 1930 was also that back then a
bank made a mortgage and held it to the end; not
so often anymore

[drypowder]

sheesh, you know how to tell when the obozo hussein is lying...................good lord

[what's up]

Actually, he's not an illiterate.

He knows exactly what will juice the economy...and he and his cronies do the opposite.

These people get power thru social engineering, not prosperity.

[Rodamala]

Like I said before the ZOT... his purple lips are moving.

[Cheerio]

Obama's Speech On Free Markets For Housing Was A Complete Lie

There I fixed it for all time - should cover eight years or more that he intends to occuy the office of KING.

[mjp]

Obama is suggesting a NEW Fannie Mae, the preservation of the 30 year fixed-rate mortgage, and expanding the credit box (aka, relaxing credit requirement for mortgages). And 5% down payment mortgages (which The Fed calls semi-prime).

Now, we already have inflation, so, he just needs to keep interest rates artificially low, and we will soon have a nice new fresh housing bubble in no time, ready to burst and bring about a new recession.