August 7th, 2013 9:18 AM by Michael and Jill Kohler
President Barack Obama on Tuesday proposed and outlined a broad overhaul of the nation's mortgage finance system, including winding down government-backed Fannie Mae and Freddie Mac. He declared that taxpayers should never again be left "holding the bag" for the mortgage giants' bad bets. The president said sweeping housing reforms are still needed to ensure that a rejuvenated market doesn't simply "re-inflate the housing bubble." The cornerstone of that effort is winding down Fannie Mae and Freddie Mac, a proposal with bipartisan support in the Senate.Get your FREE Quote Now!
While the president has previously endorsed overhauling Fannie and Freddie, his remarks Tuesday marked the first time he outlined his specific proposals for doing so.
The president wants to replace Fannie and Freddie with a system that would put the private sector, not the government, primarily at risk for loans. The government would still be involved, both in oversight and as a last-resort loan guarantor.
Obama is also seeking guarantees that a private sector-led mortgage finance system would still ensure wide homeowner access to popular 30-year mortgages at fixed rates.