BLOODHOUNDBLOG.COM

There’s always something to howl about

Obama’s “plan” for Fannie and Freddie? It’s FHA, as it turns out.

That’s not what they’re actually saying. But the law of unintended consequences will win out in the end. From the Wall Street Journal:

All of the administration’s proposals envision a scaled-back role for the government. One includes a new government backstop of certain mortgages under a federal “reinsurance” model, while another would propose a more limited backstop that would scale up primarily during times of economic crisis. The third option proposes no such government backstop beyond existing federal agencies such as the Federal Housing Administration.

Owner-occupied transactions are already overwhelmingly FHA — with the result that HUD is well on its way to becoming the biggest player in the lender-owned market. Getting rid of Fannie and Freddie won’t matter at all if their role in underwriting bad mortgages for unqualified buyers is supplanted by FHA.

5 comments

5 Comments so far

  1. […] This post was mentioned on Twitter by Mark Risley, Real Estate Ninja. Real Estate Ninja said: Obama’s “plan” for Fannie and Freddie? It’s FHA, as it turns out. http://bit.ly/hnYpC0 […]

  2. […] If you want to follow the conversation on a national real estate site that does not pull punches visit this article on Bloodhound Blog and see where the conversation […]

  3. Brian Brady February 11th, 2011 12:40 pm

    “with the result that HUD is well on its way to becoming the biggest player in the lender-owned market.”

    How you like us now?

    Signed,

    The National Association of Real-uh-tors

  4. Thomas A B Johnson February 12th, 2011 10:02 pm

    But, but, with Fannie gone, who will buy Barney Frank’s lap dances?

  5. […] Cash buyers will be far better than borrowing buyers – Government’s not going to get out of the mortgage business. – Can’t live with ‘em, can’t live without ‘em – Calculated Risk likes […]