In an attempt to start weaning mortgage finance Giants Fannie Mae and Freddie Mac out of taxpayer funding, the two companies may need to start higher taxes as a lender of charging and require additional mortgage insurance.
According to Edward DeMarco, Director of the Federal Housing Finance Agency and the current regulator of Fannie and Freddie, these changes could reduce the risk of further loss of housing for taxpayers.
These changes would have to be phased in gradually and would not happen immediately, but should be expected in 2012, with some warning, "as he said in a recent speech at a Conference in Raleigh Mortgage DeMarco.
Fannie and Freddie, which buys and secure mortgage loans from lenders and then bundle and resell to investors, have been taken into conservatorship of Government in the autumn of 2008, when they were collapsing and considered "too big. too fail. " Now the two giants back about 90 percent of mortgages in the country.
DeMarco said the FHFA has tried to find ways to limit the involvement of the taxpayer in two companies, as the Federal Government has not yet decided on a plan for the future of Fannie and Freddie.
"We all knew that reforming the housing finance system was going to be difficult, but I think the general expectation was that further progress would have been made by now," said DeMarco, as quoted in an article in the Washington Post.
Opponents of proposed tax hikes mean rising costs will be passed on to consumers and will further depress the housing market. Yet DeMarco told reporters that,
"These are steps we can take and we think we are in charge of recruitment which are favourable in that direction. This will measure ultimately consumers from price and availability of mortgage credit, and in another macro sense … whether there is a sense of confidence in real estate markets or stability. "
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