Recently, Obama in Phoenix addressed a group of high school students and teaching staffs, focusing on the soaring house prices. He particularly mentioned Arizona as the place for bursting of housing bubble in 2007 and 2008. Obama expressed his plans to modify the existing mortgage finance system, with the view of preventing repeated financial deficit and helping struggling homeowners. He particularly mentioned that Arizona had been responsible for draining put trillions of dollars in household equity.
Barrack Obama’s main idea revolves around holding the reins of two major fiscal groups Fannie Mae and Freddie Mac. These two groups are government-sponsored section, providing leading loans to buyers. Almost half of United States borrows home loans from them. The president accuses them of motivating people to buy houses that they cannot afford. The government will make a move to put these two companies in a process where the private market will get loans and provide security to the investors. The government plays a vital role in such a scenario. It will act as a guarantor for those securities. The two companies alone catered to a insolvency costing the taxpayers $187.5 billion. Real change is possible if the federal government can make a provision to refinance their loans at lesser rates of interest. In this respect, he urged the Congressmen to support long-stalled legislative bills.
Republican Senator Bob Corker favored President Barrack Obama’s comment and approach. Adding that his proposals, have given a boost to the labors of reforming mortgage finance., Another capital market analyst, Edward Mills remarks that Barrack Obama’s move are well-timed keeping in mind the present market condition of housing loans. The House is soon expected to pass a structural reform bill. This housing finance reform bill will aim at putting an end to the Fannie Mae and Freddie Mac model of public losses and private gains.
Obama’s tours are more like organizing a stage for 2014 election of the Congress. It is also like a strategy to draw a picture for the budget session scheduled for latter this year. The president criticized the Republican opponents over the immigration issues. Putting in, that, houses are mainly bought by non-natives, who are willing to settle in United States of America. He threw light on the immigration reform that is been held by the House for a long time now. These immigrants will provide a boost to the housing loans market and charge it up, leading to significant economic growth. The undocumented people are the most important buyers of houses. Among the very few people’s representatives, who supported the immigration reform are from Arizona, the ground zero for housing bubble bursting. The two Arizona senators are Republicans John McCain and Jeff Flake.
In his speech Barrack Obama, stressed on the fact that time and strategic planning are required to change the situation. The mortgage finance market is showing considerable change. Still America is not in a position where it should be. They need to focus on the present crisis and built on the progress it has already made.