The Obama Administration is out with a brand new plan to reform the U.S. mortgage market, and from an early glimpse at the plan, banks are going to love it — but government-sponsored enterprise’s? Not so much.
The reaction from impacted groups are coming in hot and heavy after the release of the white paper on February 11, 2011. You can read the entire report here, but if you’re looking for the gist of the report, here’s what you need to know:
- The Administration’s plan will wind down Fannie Mae and Freddie Mac and “shrink the government’s current footprint in housing finance on a responsible time-line.”
- The White House aims to implement reforms that would fix “fundamental flaws” in the U.S. mortgage market via consumer protection standards and better underwriting practices.
- The White House wants to ensure that “creditworthy but under-served families” who want a home, can get one.
“This is a plan for fundamental reform – to wind down the GSEs, strengthen consumer protection, and preserve access to affordable housing for people who need it,” says Treasury Secretary Tim Geithner in a statement. “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 of the housing market.”
That’s fine, but in the money game, it’s all about the scoreboard. In other words, who wins and who loses with the new mortgage reform proposals? Let’s take a look…
Image by Nevada Tumbleweed, via Flickr