President Barack Obama underlined his commitment to winding down Fannie and Freddie while maintaining access to 30-year, fixed-rate mortgages and emphasized the need for more affordable rentals to allow tenants to build down payments in a question and answer session hosted by real estate portal Zillow on Wednesday.
The questions came from citizens who submitted queries through YouTube and Twitter, while Zillow CEO Spencer Rascoff acted as moderator.
On Tuesday, Obama offered his support to the bipartisan Corker-Warner plan to wind down Fannie and Freddie, while retaining a government backstop in the mortgage market to ensure the survival of the 30-year fixed-rate mortgage. The Q&A session reemphasized the speech’s themes.
“During both the bubble and its aftermath, Fannie and Freddie just got too big,” Obama said, adding it was important to shrink the government’s role in the mortgage market, but to do so slowly in order not to derail the housing recovery.
Obama also offered praise for the role the private market, particularly investors who have bought up many foreclosed homes, have played in helping the market to recover. Such investments “can be good business sense for them, but just as importantly, this can be useful for middle-class families who have seen the values of their properties drop,” he said.
The president was confronted by several questions on how to make housing more affordable for the middle-class, including one from a student burdened by loan payments and a teacher worried she wouldn’t be able to afford a down payment.
Obama said policies his administration has in the works to help grow the economy in general and reduce the cost of college would serve to help these issues. But he suggested having affordable rental options available while people were saving up for a down payment was essential.
“Michelle and I lived with Michelle’s mom for two years while we put together the money,” he said.
The venue for the president’s visit ruffled some feathers in the real estate industry, with the National Association of Realtors (NAR) releasing a set of talking points for association executives troubled by questions from members about why Zillow was picked to host the president rather than the industry group.
“Our defense of issues that directly impact Realtor business and the ability of Americans to own and invest in real estate sometimes contrasts NAR’s positions with those of the administration,” the group wrote. “Zillow does not engage in the public policy arena. Zillow’s website is about using housing as fodder for entertainment, which is what this event aims to do.”
