Obama Administration proposes phasing out Freddie and Fannie

[30ashopper]

WASHINGTON ? The Obama administration released a broad outline on Friday for the future of housing finance in the United States, calling for a substantial reduction in government support for the mortgage market but providing few concrete details about how it should be accomplished.

In a 31-page report, the administration proposed that the two mortgage lending giants, Fannie Mae and Freddie Mac, should be gradually abolished within 10 years at most, and it gave Congress three options for reducing the government?s role in supporting homeownership. It did not recommend an option; instead, the document was intended to set parameters for what is certain to be a heated and protracted debate.

http://www.nytimes.com/2011/02/12/business/12housing.html

Go Bama!

 

[scooterbug44]

Yep, long overdue IMO. No reason why the US government should hold 90% of the mortgages in the US. Also no reason why someone should not have at least 10% cash to put down on a house purchase.

The only negative I can find is that they think banks will not want to offer a long term fixed mortgage - they will want rates that fluctuate to maximize their profits.