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Obama Focuses On Making Home Ownership More Accessible


It's MORNING EDITION from NPR News. I'm Renee Montagne.


And I'm David Greene at NPR West in California with you, Renee. It's fun sharing a study here with you.

MONTAGNE: Yeah, you're so welcome. It's so nice to have you with us.

GREENE: Well, it's great to be here. And President Obama is also on the West Coast right now and he's preparing for a visit to the Marines at Camp Pendleton in San Diego County today. Last night he made appearance on "The Tonight Show" with Jay Leno. The president's western road trip centered on a speech about housing. Obama gave that yesterday in Phoenix.

He described a plan with many elements that includes a proposal to wind down Fannie Mae and Freddie Mac, the giant mortgage companies that guarantee most long-term mortgages in the United States.

NPR's Ari Shapiro reports.

ARI SHAPIRO, BYLINE: President Obama last spoke about housing in Phoenix four years ago, when the market looked very different.

PRESIDENT BARACK OBAMA: I'm here today to talk about a crisis unlike we've ever known.

MYRANDA SHIELDS: That's when the foreclosures were picking up like crazy and a huge number of agents left the market.

SHAPIRO: Myranda Shields is a real estate agent in the Phoenix area. Just before the big crash, she worked as a loan officer.

SHIELDS: You could get a deal done for somebody working in fast food making eight bucks an hour. You know, they could buy a $250,000 house.

SHAPIRO: Those deals got done - a lot of them - and the houses went into foreclosure. Credit went into a deep freeze. Now things are slowly coming back, as the president said yesterday.

OBAMA: Home prices are rising at the fastest pace in seven years. Sales are up nearly 50 percent. Construction is up nearly 75 percent.

SHAPIRO: But many housing experts believe lenders are still being too cautious. Some people who should be able to buy a house can't qualify for a loan.

Mike Calhoun is president of the Center for Responsible Lending.

MIKE CALHOUN: Too many people, particularly those of middle incomes, can't take advantage of these record low interest rates. And the housing prices that are still significantly below the peaks that they were at in 2007 and 2008, they just can't get a mortgage.

SHAPIRO: Housing accounts for nearly a fifth of the U.S. economy. So if the housing market is not as active as it could be, it slows the economic recovery.

Scott Simon was managing director in charge of mortgages at an investment firm called PIMCO.

SCOTT SIMON: If you got the single-family housing market going again, you know, you could certainly add a percent to GDP for a few years.

SHAPIRO: A one percent bump would be a lot, since the economy is growing at about one and a half percent right now. That's one reason President Obama is focusing on ways to make home ownership more accessible.

OBAMA: What we want to do is put forward ideas that will help millions of responsible middle-class homeowners who still need relief, and we want to help hard working Americans who dream of owning their own home fair and square.

SHAPIRO: Most of the ideas he talked about yesterday are not new. He wants universal refinancing, an immigration bill, and a project to get rid of blighted properties. All of that, he says, will help the housing market.

But the most eyebrow-raising part of his plan involves winding down Fannie Mae and Freddie Mac, the companies that guarantee most long-term fixed-rate mortgages in the U.S.

OBAMA: I believe that our housing system should operate where there's a limited government role and private lending should be the backbone of the housing market.

SHAPIRO: In this plan, private lenders would guarantee 30-year mortgages. They would pay the government a fee to be the backup of last resort. Scott Simon, who's Republican and spent his career in mortgage investments, likes the idea.

SIMON: If you want the government out of housing because you don't want them on the hook, it gets you that. If you want mortgages to be available to the middle-class, it gets you that. So it seems to have something that appeals to everyone without making anyone insane.

SHAPIRO: This proposal has bipartisan support in the Senate but some House Republicans don't like it. They would rather get the government out of the mortgage insurance business altogether.

Housing Secretary Shaun Donovan says the administration is not waiting for Congress. He's already taking steps to wind Fannie and Freddie down.

SECRETARY SHAUN DONOVAN: Steps like lowering their loan limits, putting private capital in front of the taxpayer guarantee for new loans that are being made at Fannie Mae and Freddie Mac, and also winding down their portfolios, which are essentially used like hedge funds.

SHAPIRO: Donovan says the administration needs Congress to act. But anyone in Washington knows you can't always make that happen.

Ari Shapiro, NPR News. Transcript provided by NPR, Copyright NPR.

Ari Shapiro has been one of the hosts of All Things Considered, NPR's award-winning afternoon newsmagazine, since 2015. During his first two years on the program, listenership to All Things Considered grew at an unprecedented rate, with more people tuning in during a typical quarter-hour than any other program on the radio.