Word: homeownership
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Dates: during 2000-2009
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...bigger question looming over the FHA, though, is this: At what point does a federal housing agency start to pull back and force private players to resume responsibility for the loans they make? The FHA was founded in 1934 as a way to extend the prospect of homeownership to people who wouldn't otherwise be able to afford it. The agency's low down-payment requirement - itself the subject of some controversy - is designed to help deserving if underqualified people get a foothold in property ownership. The FHA was never meant to be the primary way America finances its home...
...With the banking system still shaky, further big declines in house prices could bring disaster. Slowing a price collapse is a reasonable aim of government policy. But as we dig out of this mess, we ought to ask whether the vast infrastructure of government support for homeownership that has been built up since the 1930s is really such a wise policy...
...subsidize homeownership? Let me count the ways. First, more than 80% of the mortgage loans made in the U.S. so far this year have been bought by the government-sponsored entities (GSEs) Fannie Mae, Freddie Mac and Ginnie Mae. That keeps the interest rates on those GSE-backed mortgages substantially lower than on mortgages that can be sold only on private markets, because taxpayers are on the hook for defaults on the former. That risk, long hypothetical, became reality as we got stuck with a $291 billion rescue bill for Fannie and Freddie in the fiscal year that ended...
...thing, they push us to buy rather than rent. There's a positive side to this, as homeowners tend to take better care of their property and their neighborhood than renters do. But there's a negative one too, particularly in times of economic upheaval like this, as homeownership becomes an economic ball and chain that keeps workers from moving to areas where jobs are more plentiful. Subsidies also tempt us to buy more house than we would otherwise, a wasteful use of capital - not to mention of the energy it takes to heat and cool large houses. Finally, subsidizing...
...action. These groups are powers in Washington. The National Association of Realtors gave more money than any other group to candidates in the last elections ($4 million), according to the Center for Responsive Politics, and its 1.1 million members can do a lot of lobbying. Hence the subsidies for homeownership that never go away. In 1961 departing President Dwight Eisenhower warned of "the acquisition of unwarranted influence" by what he dubbed the military-industrial complex. Maybe it's time to call out the real estate - industrial complex...