Washington is preparing to rebuild the national mortgage market atop the ruins of Fannie and Freddie. The proposal, due early next year from the Obama administration, could make it harder to buy a home by reducing available credit or requiring bigger down payments. What happens when it is more difficult to buy a home? Will home values increase?
Also, it looks like the Obama administration will direct its focus on the non-home-owner next. Low-income renters might get more government help. Sheila Bair, chairman of the Federal Deposit Insurance Corp., asked recently "whether federal policy is devoting sufficient emphasis to the expansion of quality affordable rental housing." Owning a home, she said, might not work for everybody. So, what does that mean? Are all of the Fannie and Freddie foreclosures going to be held and turned into affordable housing? Is more aid (code word for tax dollars) going to be given to subsidize rent payments?
Next Tuesdays meeting, and the analysis of said meeting, will be very interesting. Afterward, I'll throw my 2 cents in for your reading enjoyment...
