Editorial
Washington Examiner
8/30/2010
It’s time for a fundamental rethinking of the federal government’s role in the mortgage industry.
The importance of doing so was highlighted last week when the National Association of Realtors reported a 27 percent decline in home sales in July, compared to June, reaching the lowest point since NAR started tracking the numbers in 1999. The association’s chief economist, Lawrence Yun, said the decline may continue in coming months, but he added that “a sales recovery could pick up quickly, provided the economy consistently adds jobs.”
Such optimism about job creation rests on shaky foundations: The Labor Department reported last week that the four-week average of people filing first-time claims for unemployment benefits remained high at 486,750. And total unemployment — counting the underemployed and those who have given up looking for work — is still near 20 percent.
With so many unemployed, growing legions of people simply can’t afford to buy homes. But don’t tell that to Fannie Mae, Freddie Mac and the Federal Housing Administration, through which the federal government now holds 90 percent of all mortgages in the United States. Fannie and Freddie have cost taxpayers almost $150 billion in direct government bailouts since they were seized by the government two years ago. There’s also the trillions more they cost taxpayers by sparking the Great Recession of 2008.
The editorial continues at the Washington Examiner.
