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President Barack Obama called for a continued government role to backstop the U.S. mortgage market as part of the administration?s plans to shore up the nation?s housing finance system, wind down Fannie Mae and Freddie Mac, and encourage more private investment in the system.
Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Charlotte, N.C., commended the president for affirming the importance of maintaining a federal backstop as part of efforts to revamp the housing finance system and protect the 30-year mortgage.
?This will preserve financial stability, promote investor confidence, and limit taxpayer exposure,? Judson said.
President Obama outlined four specific steps that should be part of any housing finance reform during an Aug. 9 speech in Phoenix:
1. Private capital should take a bigger role in the mortgage market. Our housing system must have a limited government role. Private lending should be the backbone of the housing market, including community-based lenders who view their borrowers not as a number but as a neighbor.
2. No more leaving taxpayers on the hook for irresponsibility or bad decisions. We encourage the pursuit of profit?but the era of expecting a bailout after your pursuit of profit puts the whole country at risk is over.
3. Preserve access to safe and simple mortgage products like the 30-year, fixed-rate mortgage. That?s something families should be able to rely on when they make the most important purchase of their lives.
4. Keep housing affordable for first-time homebuyers and families working to climb into the middle class. We need to strengthen the FHA, support affordable rental housing, and keep up our fight against homelessness.
Judson applauded the proposals and noted the President also stressed that a healthy housing market is needed to create jobs, build a strong middle class, and maintain a vibrant economy.
Judson also noted other reforms the nation?s home builders support, including strengthening the FHA to facilitate the flow of mortgage credit to qualified home buyers, cutting red tape, and easing tight credit conditions that are preventing creditworthy borrowers from obtaining home loans, and supporting the low-income housing tax credit to ensure the availability of safe and affordable rental housing.
?This will help spur job growth, provide homeownership and rental opportunities for all Americans, and boost the economic expansion,? Judson said.
