Obama to Support 30-Year Mortgage in Speech

August 6, 2013

President Barack Obama is making it clear in his housing-focused economic speech today in Phoenix that he envisions the 30-year fixed-rate mortgage to be the centerpiece of any reformed mortgage system.

“Homeownership remains the primary way that most middle-income working families build long-term wealth and provides a foundation for widely shared economic growth,” the Obama Administration said in a fact sheet released prior to the president’s speech. Any reforms to the secondary mortgage market, the fact sheet said, must ensure “the continuation of the 30-year mortgage in goods times and bad.”

Obama’s plan envisions a continuing presence of the federal government in the secondary mortgage market to provide “catastrophic” insurance when needed after private insurers have met their responsibilities. “Private capital should bear the substantial majority of losses,” said the fact sheet, which provides an outline of what the president’s remarks cover.

The leadership and executive staff of the Phoenix and Arizona associations of REALTORS® are attending the speech today at Desert Vista High School in Phoenix at 4:05 p.m. EST. “REALTORS® are looking forward to supporting the continuation of safe 30-year fixed-rate mortgage financing in any way we can,” said Diane Scherer, CEO of the Phoenix Association of REALTORS®.

Scherer and other attendees, using the handles “phxrealtors” and “dscherer,” plan to provide updates from the speech via Twitter using the hash tag #obamaphx.

Among other housing matters Obama is covering in his speech are the administration’s plans for continuing the phase-out of Fannie Mae and Freddie Mac — the two secondary mortgage market companies that are in conservatorship — and the development of a common securitization platform to encourage investment in mortgage-backed securities.

He also will reinforce the federal government’s commitment to maintaining direct support for safe, affordable mortgage financing under FHA (though he favors allowing FHA loan limits to decrease), the Rural Housing Service, and the Department of Veterans Affairs.

Obama will also once again seek expansion of the administration’s refinance program to include troubled borrowers with mortgage loans not backed by the federal government.  

NAR supports maintaining the 30-year fixed-rate mortgage and keeping an explicit federal role in the secondary mortgage market. NAR also backs continued strong support of FHA, RHS, and VA guaranteed-loan programs. 

More on the speech is at the White House’s website at http://www.whitehouse.gov/a-better-bargain#housing.

— By Robert Freedman, REALTOR® Magazine