Obama to unveil new housing initiatives Thursday

by MPA06 Jan 2015
President Barack Obama will talk new housing initiatives in a speech to be delivered Thursday in suburban Phoenix. While details of his address have yet to be released, industry experts suggest the president will avoid the hot button topics of GSE reform and the elimination of Fannie Mae and Freddie Mac.

The omission could signal that the administration is stepping back on its previous housing reform push.

"We believe the absence of the topic in his Phoenix speech may be seen as a sign that the administration is giving up on its goal of unwinding the (government sponsored enterprises)," according to analysts from New York-based investment bank Keefe, Bruyette, & Woods.

In early 2011, the Obama administration called for the slow death of mortgage giants Fannie Mae and Freddie Mac, and in 2013, the president urged for a replacement of the GSEs with a new government mortgage reinsurer that would be more insulated from financial reverses.

Congress is also calling for the unwinding of Fannie and Freddie. In November 2014 during a Senate Banking Committee hearing, lawmakers grilled Federal Housing Finance Agency (FHFA) Director Mel Watt and pushed for a move toward dismantling the mortgage giants to set up a new housing finance framework.

In his Arizona speech this week, the President will talk about new housing initiatives, which could include easing mortgage lending standards. "I think the president could talk about some relaxing of lending requirements," said Sheila Harris, former director of the Arizona Housing Department and board member of the Federal Reserve Bank of San Francisco told The Arizona Republic. "It should be easier, but not easy, for qualified borrowers to get mortgages."

This won't the first time Obama has traveled to Arizona to speak on housing policies. In August 2013, he spoke in Phoenix about the need for a new government reinsurer, and in 2009, he used Desert Vista High School in Phoenix as the location to present the $75 billion federal housing plan called Making Home Affordable.

According to The Arizona Republic, foreclosures in the metro Phoenix area are have fallen back to 2007 levels, and home prices are back up to 2004 levels.

The president is scheduled to deliver his remarks between 10 a.m. and 10:30 a.m. Thursday at Central High School, 4525 N. Central Ave. in Meza, Arizona.

Although a preview of Obama’s speech hasn't been released, White House spokesman Josh Earnest said the president will “spotlight how the recovering housing sector has helped restore wealth and economic security to millions of middle class families and announce new steps to help more Americans achieve the American dream of owning a home.”
Earnest added that Obama will look for opportunities to work with Republicans in the new session of Congress. But he said Obama will act on his own when the need arises. “Where Republicans don’t agree, you’re going to see the president take decisive action to make progress on his own where he can."

"There are a number of issues we could make progress on, but the President is clear that he will not let this Congress undo important protections gained - particularly in areas of health care, Wall Street reform and the environment," Earnest added.


Should CFPB have more supervision over credit agencies?