President Barack Obama will call for reforming Fannie Mae and Freddie Mac, and tout granting legal status to illegal immigrants as a means to boost the nation's housing market.
US President Barack Obama steps over a puddle as he walks to Marine One prior to departing from the South Lawn of the White House in Washington, DC, August 6, 2013. Obama travels to Phoenix, Arizona to speak about housing and the economy, before heading to Los Angeles to tape an appearance on the Tonight Show with Jay Leno. Credit: AFP/Getty Images
Obama will be speaking Tuesday at Desert Vista High School in Phoenix, Ariz. in the midst of an already improving housing market. The White House issued a “fact sheet” Monday evening featuring what Obama would be talking about in the speech.
The fact sheet states that the administration plan would help families save $3,000 a year by refinancing while mortgage rates are still low, take executive action to cut red tape to make mortgages more available, and a demand that the Senate confirm Obama nominee Mel Watt as the Federal Housing Finance Agency director.
The White House goes on to talk about how comprehensive immigration reform would increase home values.
“In addition to growing GDP, the common sense immigration reform passed by the United States Senate would substantially increase home values,” the White House statement says. “Between 2000 and 2010, immigrants accounted for almost 40% of new homeowners nationwide. Immigrants accounted for over 80 percent of the growth in homeowners in California and over two-thirds of the growth in homeowners in New York over the past decade. Elsewhere, such as Georgia and North Carolina, they accounted for between one-quarter and one-third of the growth in homeowners.”
Proponents of immigration reform support granting legal status, or a “pathway to citizenship” for illegal immigrants currently in the United States. Legislation also includes increased border security.
Mortgage giants Fannie Mae and Freddie Mac – both government-sponsored enterprises – were widely seen as responsible for the 2008 housing market crash. The White House statement calls for changing their “failed business model so taxpayers are never again on the hook for bad loans and bailouts.”
“Fannie Mae and Freddie Mac should be wound down through a responsible transition, and the government role during normal times should be no bigger than necessary to achieve the principles laid out here,” the White House “fact sheet” states. “One of the failures of the old Fannie Mae and Freddie Mac model is that shareholders and senior managers benefited from implicit guarantees while taxpayers were on the hook.”
The plan states that “private capital must be wiped out before the government pays out on catastrophic guarantees provided through government reinsurance of private-market loans.”
Conservatives have long advocated reforms for the two GSE's, but the Obama administration proposals for reform are fairly broad at this point and things could change as more details move forward.
The White House statement also said it “proposed $15 billion for Project Rebuild in the American Jobs Act to help more hard hit communities turn the corner to recovery by getting their construction workers back on the job rehabbing and in some cases demolishing blighted vacant homes, creating jobs and improving communities.”