Mortgage Aid still needs to be offered to the Middle Class

The American Dream …. Many people come to the United States for many reasons, usually because of the freedom and opportunity our country offers to many people of all cultures and religions. One of the most valued goals for many Americans is home ownership. A place to call our own, our home and where we go to relax and unwind from the busy day.

With the financial crisis behind us, and as we work our way back to some sort of normal in the housing market, many questions have been raised on how we approve, assist and lend mortgages in this country. At the height of the real estate market many people took out mortgages for homes that they could not really afford, this is one of the many reasons why we are in a foreclosure crisis now. Lenders, investors blindly gave mortgages to high risk consumers with not so perfect credit. We all got caught up in the good times of a strong economy and hopping real estate market.

Flash forward to today and the fall out of everything that has happened in the past few years. The federal government wants to pull out almost completely of the mortgage industry. No longer do they want to risk tax payer’s money on backing mortgage securities, hence the end of Fannie Mae and Freddie Mac.

A former investment banker Douglas J Elliot of the Brookings Institution suggests that the federal government not end all support for mortgages. Many homeowners would not be homeowners without the federal sponsored programs for first time home buyers. Why punish Americans for a faulty system that went crazy because of loose guidelines and greedy investors.

Our options are twofold, we can look at revamping how Fannie Mae and Freddie Mac continue in the housing market and how much involvement those agencies and others should partake and how will the private sector handle picking up where Fannie Mae and Freddie Mac left off.
Unfortunately there are many middle class Americans that need programs that help them with purchasing their first home. If there is anything we have learned, we need better transparency when lending money for mortgages. Our middle class makes up more than half of all citizens in the United States. I agree the system needs to be fixed but before we act too soon we need to slowly think about what we are doing before implementing anything new.

Ending government involvement one hundred percent is not the answer, it is obvious the lending industry needs support, and government involvement to keep the checks and balances in place.