“The next president, whoever it turns out to be, is going to have a couple of big housing issues to address,” said Barry Zigas, director of housing policy at the Consumer Federation of America. For starters, “what is the government’s role in housing finance and will consumers have access to mortgages at affordable rates?”
On the campaign trail, Obama and Romney have hinted at the next steps they’d take, though neither campaign has outlined a comprehensive proposal for recovery of the housing market and private mortgage lending.
Obama would build on his programs already underway for foreclosure relief, expanded refinancing and loan modifications, while continuing to implement new housing finance rules and consumer protections under the Dodd-Frank Act. He also supports proposed legislation that would make it easier to refinance.
“The administration has put forward a plan to help more responsible borrowers refinance their mortgages — saving hundreds of dollars per month — while taking concrete steps to help families stay in their homes, revitalize the communities hardest hit by the housing crisis, and reform the mortgage lending market to better protect both consumers and taxpayers,” Obama campaign spokesman Adam Fetcher said in an e-mail.
Romney, on the other hand, would repeal Dodd-Frank and replace it with streamlined regulations that make it easier for the private sector — especially smaller financial institutions — to reenter the mortgage market. He hasn’t outlined what those new regulations would be.
“We have to have regulation, but we need it modern and up-to-date,” he said at an Aug. 13 appearance in St. Augustine, Fla. “When you have massive regulations, it makes it harder for small banks and regional banks to be able to make the loan modifications they need to make and to also get credit to people.”
Whether you already own property or hope to buy in the future, the next president’s housing policies will affect you. Zigas and other experts suggested keeping an eye on the following areas:
The mortgage market
At the depth of the recession in 2008, a federal conservator took over housing giants Fannie Mae and Freddie Mac to avoid a real-estate meltdown. Some form of federal guarantee has backed more than 90 percent of the U.S. home mortgages originated since then.
The next president will have to decide how much of the housing market will continue to be subsidized by the federal government, and through what structure. “No one is going to propose to keep Fannie and Freddie in their current form,” said Sarah Rosen Wartell, a housing expert and president of the Urban Institute.