Obama 2008: Democrats....measure progress by how many people..find jobs/pay mortgage

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Could Falling Mortgage Rates Spur Housing Growth?
May 30, 2014 — As mortgage rates fall to a seven month low and home prices start to settle, some investors wonder if this combination will be a boon to the housing market.

Freddie Mac said average rates on 30-year fixed mortgages fell to 4.12%, compared to 4.14% from last week. The S&P/Case-Shiller Index, which tracks national home prices, rose only 0.17% during the first quarter. After all, the housing market has stumbled over the past several months, largely due to cold weather. But analysts expected stronger housing data around this time, when poor weather conditions are no longer part of the equation, pointing to a potentially more systemic issue in the housing market, beyond cold weather.

On Thursday, pending homes sales, which tracks homes under contract, rose only 0.4%, according to the National Association of Realtors. "Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective home buyers' confidence," says Lawrence Yun, chief economist at the National Association of Realtors.

Other weakness in the housing market surrounds housing starts, or the volume of new construction homes, which showed strength for multi-family homes and weakness in construction of single-family homes, according the latest reading released in mid-May.

Will lower borrowing costs and home prices make things easier for new home buyers? "We've come through the initial period of a pretty rapid recovery and it's now beginning to slow down," says David Blitzer, managing director and Chairman of the S&P Index Committee. "I would expect more supply to come in over the summer and houses to stay on the market a little longer."

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Fannie Mae And Freddie Mac Face Uncertain Future, Despite Profitability
March 26, 2014 — While mortgage guarantors Fannie Mae and Freddie Mac have turned profitable in recent months after its epic $187.5 billion taxpayer bailout in 2008, the future of these entities remains nebulous.

As home prices have recovered over the past five years, Fannie and Freddie are expected to send $202.9 billion in dividends to the U.S. Treasury by the end of March. Still, lawmakers are trying to decide what role the entities will play in the housing market going forward. A bipartisan Senate legislation announced in March would install a new mortgage insurance system, instead of Fannie and Freddie, with greater reliance on private investors swallowing potential mortgage losses, instead of taxpayers and the government immediately stepping in during a future crisis. At this stage, it is unclear if the bill will gain enough political traction to pass.

The entities came under fire for their role in 2008 financial crisis, where subprime and sometimes fraudulent mortgages tainted the housing market, causing an economic house of cards to ensue. Adding to the uncertainty of Fannie and Freddie is a pending legal battle. Shareholders have filed a lawsuit against the U.S. Treasury, in an effort to gain some of the entities' recent profits. As part of the 2008 bailout, the government was entitled to a 10% yearly dividend. Back in August 2012, a new deal was negotiated in which the Treasury was entitled to a 100% dividend, leaving shareholders with the short end of the stick.

Regardless of the shareholder battle, Fannie and Freddie remain an important part of the housing market. While the entities do not loan directly to consumers, they guarantee and securitize mortgages, packaging them into bonds and selling them to investors. This provides liquidity to the $10 trillion mortgage market.

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