“Adequate housing goes to the very root of well being of the family, and the family is the social unit of the Nation. The question involves important aspects of health, morals, education, and efficiency. Nothing contributes more to social stability and the happiness of our people than the surrounding s of their homes. …It should be possible in our country for any person of sound character and industrious habits to provide himself with adequate and suitable housing and preferably to own his own home”?Franklin Roosevelt, you say. Close, in time anyway.
No, Herbert Hoover spoke those words in 1931 when he announced the President’s Conference of Home Building and Home Ownership. A year later, Hoover signed the Federal Home Loan Bank Act. Franklin Roosevelt expanded on Hoover’s effort, and homeownership became an article of American public policy.
But maybe not for long. A recent joint Treasury and HUD report recommends changes that could increase mortgage costs and push homeownership beyond the reach of some families, a February 11, 2011 New York Times story reports. Federal programs subsidized nine in 10 mortgage loans in 2010. Government-chartered corporations buy up bank mortgages and sell shares in these mortgages pools to investors, guaranteeing to repay them in exchange for a lower interest rate. In the meantime banks wipe the mortgages (and the risk) off their books and get a cash injection allowing them to make more mortgages.
The joint report proposes:
1. eliminating government guarantees for middle class mortgages,
2. offering the guarantees only during fiscal downturns, or
3. limiting the current guarantees to only those banks that agree to reduce the government’s risk of loan defaults by purchasing a guarantee from a private insurer.
That’s not all. The report also noted that “policies like allowing homeowners to deduct mortgage interest payments from taxable income—an expensive pillar of the government’s housing campaign—encourage people to invest in housing rather than other parts of the economy, and deserve to be reconsidered.”
