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| Biden's New Dilemma: How To Slash Housing Costs For Low-Income Borrowers |
| 2021-07-07 |
| [FoxBusinessNews] A long-awaited Supreme Court decision last month gave President Joe Biden the ability to remove the Trump-era leader of the Federal Housing Finance Agency, and he wasted no time. Dworkin and other housing advocates want FHFA to allow Fannie and Freddie to take on more financial risk — meaning more government intervention backed by taxpayers — in the name of expanding access to mortgages. Among their ideas: Giving Fannie and Freddie free rein to purchase mortgages with lower credit scores, allowing private lenders to make more of those loans; cutting fees; and expanding investment that supports the construction of multifamily rental properties. Advocates want FHFA to immediately do away with Trump-era limits on Fannie and Freddie's purchases of “high-risk” loans — characterized as having some combination of low credit scores and high debt-to-income or loan-to-value ratios. Allowing the companies to purchase and guarantee more of the loans could lead to lenders issuing more of them, which would extend credit to more low-credit-score, low-income borrowers without requiring higher down payments to compensate for the risk. Fannie and Freddie would pick up the tab if the loan defaulted. Dworkin said the companies today have "almost no measurable risk in their book of business," which includes borrowers who hold "extraordinarily high" credit scores and very few first-time homebuyers with low down payments. “Their job is not risk elimination,” he said. “It’s risk management. Their mission is to add liquidity to the mortgage markets, not reduce it, and they need to get back in the liquidity business and add liquidity to underserved markets.” Biden was given the opportunity to change the direction of the FHFA when the Supreme Court ruled that the agency’s leadership structure was unconstitutional and that the president should have greater authority to remove its director. Hours later, Biden fired then-Director Mark Calabria, a libertarian economist nominated by President Donald Trump who had made it his mission to shrink and shore up Fannie and Freddie so they could stand on their own as private companies. The Biden administration then appointed another senior FHFA official, Sandra Thompson, to serve as acting director. Thompson has served at FHFA since 2013, and she earlier worked for 23 years as a bank regulator at the Federal Deposit Insurance Corp., which polices lenders for safety and soundness concerns. |
| Posted by:Slavilet Chirt2694 |
| #10 Democrat solution for every single thing people complain about, spend taxpayers money, more restrictive rules and hire their allies to administer it in programs without end. |
| Posted by: NoMoreBS 2021-07-07 18:19 |
| #9 Interesting charts there, Shanter Gray2384. |
| Posted by: Raj 2021-07-07 16:54 |
| #8 Subsidies for US home buyers. Use the money they want to sent Quatamala, Mexico, etc.. |
| Posted by: Blackbeard Barnsmell6454 2021-07-07 15:34 |
| #7 |
| Posted by: Shanter Gray2384 2021-07-07 15:08 |
| #6 “Their job is not risk elimination,” he said. “It’s risk management.: Socializing the inevitable losses by any other name. Some people never, ever learn. |
| Posted by: Raj 2021-07-07 14:46 |
| #5 Because wage and price controls always work so well. |
| Posted by: Abu Uluque 2021-07-07 12:27 |
| #4 "Biden" |
| Posted by: swksvolFF 2021-07-07 11:06 |
| #3 Sounds like the sub-prime debacle prior to the run up to the economy crash of 2008. I was talking to a financial guy yesterday and asked him about housing prices escalating so rapidly. He thought it was a bubble that would burst at some point. The difference is that the many of today's purchasers are not necessarily low-income purchasers who may end up defaulting. |
| Posted by: JohnQC 2021-07-07 08:57 |
| #2 Smeggin' hell! Didn't we just do this? It does not end well. OK, it ends well for some very specific parties. At least we will get some happy headlines: Under the Joe Biden Administration, first-time home ownership has improved x-billion percent. And no more mean tweets! |
| Posted by: SteveS 2021-07-07 07:59 |
| #1 Can you say 'housing bubble'? |
| Posted by: Procopius2k 2021-07-07 07:19 |