Obama Calls for Action on Mortgage Finance Reform

President Barack Obama, in his fifth state of the union speech last night, touted the “rebounding housing market” as one of the measures of the strengthening economy and asked Congress to reform the mortgage finance system in such a way that would keep home ownership within reach of households without risking another taxpayer-funded mortgage finance crisis.

“Since the most important investment many families make is their home, send me legislation that protects taxpayers from footing the bill for a housing crisis ever again and keeps the dream of home ownership alive for future generations,” he said in his speech.

Obama didn’t offer details, but among the proposals the administration and Congress are looking at are reforms to the secondary mortgage market companies Fannie Mae and Freddie Mac, which, along with the FHA, back the bulk of home mortgage loans originated today. NAR favors reforms that would maintain federal backing of conforming mortgage loans to help ensure the availability of safe and affordable financing in good times and bad for a broad swath of responsible home buyers through a government-chartered nonprofit entity while creating conditions that would enable the return of private mortgage capital into the market.

To keep the economic recovery on track, Obama said he would take steps to speed approval of infrastructure projects, help households build their retirement through a new savings bond called MyRAs, and would require companies working under federal contracts to increase their minimum wage to $10.10. He also called on Congress to pass legislation that would raise the federal minimum wage to $10.10.

He also pressed Congress to pass immigration reform, which he framed in part as a pressing economic matter, since immigrant households have high rates of new-business starts, among other positive economic characteristics. “When people come here to fulfill their dreams, to study and invent, they make our country a more attractive place for businesses to locate and create jobs for everybody,” he said.

He touted his administration’s increase in loans to small businesses, and he called on Congress to pass patent reforms, an issue NAR has been focusing on to help decrease abusive efforts by so-called “patent trolls” to extract licensing fees from users of certain technologies, including online property search applications and some multipurpose office machines that some real estate companies use. “Let’s pass a patent reform bill that allows our businesses to stay focused on innovation, not costly and needless litigation,” he said.

On health care, the president said 9 million people have obtained health insurance, both through private companies and expanded Medicaid coverage, and 3 million children have been added to their parents’ policies.

He used the speech to encourage people who don’t have insurance to obtain insurance by March 31, which is the end of what’s known as the open enrollment period. After that date, people who don’t have insurance could face a fee.

—Robert Freedman, REALTOR® Magazine Daily News