Treasury Secretary Tim Geithner was interviewed this morning on CNBC regarding the revised role of Fannie Mae, Freddie Mac and FHA in the housing mortgage business. Geithner indicated the role of the US Government will be reduced relative to what happened leading up to the latest housing debacle.
The pace of this reform will be over the next 5-7 years, a pace that is too slow for some. Geithner indicates this pace is necessary so as not to destabilize a fragile housing market. Other analyst on CNBC indicated that this pace is not fast enough.
Components of the reform include a minimum of 10% downpayments and a higher fee for the government backed securities. Geithner says the process will encourage private sector involvement in the business of mortgage loan guarantees, although the role of the US Government in mortgage backed securities will not go away.
Hopefully this will be a good thing for the housing market going forward.
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