Yesterday in Phoenix, President Obama laid out his plan to help more Americans become homeowners. In his speech, the President put forward four ideas to reform the housing finance system, which he said will “turn the page on this kind of bubble-and-bust mentality that created [the economic] mess in the first place, and build a housing system that's durable and fair and rewards responsibility for generations to come.”
His core principles include putting private capital at the center of the housing finance system, ending tax-payer backed Fannie Mae and Freddie Mac, ensuring the availability of 30-year fixed rate mortgages, and increasing access to affordable rental housing. Already, this plan is being met with mixed reviews. Republicans in the House of Representatives have historically called for a similar plan to reduce the federal government's role in housing, but after his speech they complained that President Obama waited too long to address the problem. Many Democrats support the president's idea of replacing Fannie and Freddie with a new federal agency to preserve 30-year fixed rate mortgages, but they're concerned about giving more power to the private-sector.
According to the Think Progress Blog, there is a bipartisan consensus for the president's proposal, but the devil is in the details. They say that the only way to ensure that most Americans have the opportunity to become homeowners, is to include incentives that encourage the private market to keep home loans affordable and accessible. Owning a home provides economic security and the ability to build wealth, and it's an opportunity that too few of Americans have access to. There's still much to discuss about the President's plan, but there's no debate that we must fix the system that keeps the American Dream out of reach for so many.
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