Friday, February 11, 2011

White House proposes winding down Fannie, Freddie - Washington Times

WITH ALL THE FRAUD on foreclosures, loans, modifications and the crimes committed in coverup - once again the American public will be paying the price tag with reduction in the ability to own a home in America - 'Land of the Free and home of the Brave'

White House proposes winding down Fannie, Freddie - Washington Times: "“There is a broad consensus about the need for a transition to a smaller role for the government” in the housing market, but accomplishing this through legislation and gradual administrative changes could take several years, Mr. Geithner said.

“We are going to start the process of reform now, but we are going to do it responsibly and carefully so that we support the recovery and the process of repair in the housing market,” he said.

“Our plan is centered on bringing capital back to the private market” through the gradual scaling back of the mortgage giants, said Shaun Donovan, secretary of the Housing and Urban Development Department.

Mr. Donovan said the FHA will also start to wind down its role by increasing its insurance fees so as to encourage more private insurers to enter the market and compete with the Depression-era housing insurance agency. The FHA traditionally provided insurance for low-income home purchases, but the housing crisis also greatly expanded its role to encompass 30 percent of the mortgages made to people of nearly all income levels in recent years.

Mr. Donovan warned against attempts by some legislators to simply eliminate the FHA, Fannie and Freddie immediately rather than gradually reducing and minimizing their activities as the administration is proposing."

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