While this is a welcome stance, he also called for new government guarantees for the housing finance market, which would only perpetuate the dangerous taxpayer subsidy that helped lead to the housing crisis in the first place.
The speech comes nearly five years after federal taxpayers bailed out the two housing government-sponsored enterprises, Fannie Mae and Freddie Mac, providing some $154 billion in funds that are only now being repaid. The President promises an end to the “business model” that led to the collapse, calling for Fannie and Freddie’s investment portfolios to be wound down at a rate of 15 percent per year, stating that “private capital should take a bigger role in the mortgage market.”
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