President Barack Obama will tout the work his administration has done to stem the housing crisis and prompt a recovery while pushing for more action, including increased federal spending and new policies on access to credit for first-time homeowners, during a speech Tuesday in Phoenix.
Obama will call on Congress to authorize $15 billion for a program designed to help the country's hardest hit communities recover, by rehabbing and demolishing vacant lots, according to a fact sheet posted by Politico, set to be released following his remarks. Just five states – Nevada, Florida, Michigan, Arizona and Georgia – hold one-third of the negative equity in the United States, according to the administration.
Obama will also condemn Fannie Mae and Freddie Mac, the quasi-government housing agencies that many experts see as responsible for much of the housing crisis.
"The current housing finance system, where the government guarantees more than 80 percent of all mortgages through Fannie Mae and Freddie Mac and Federal Housing Agency, is unsustainable," said the White House fact sheet. "A reformed system must have a limited government role, encourage a return of private capital, and put the risk and rewards associated with mortgage lending in the hands of private actors, not the taxpayers."
Establishing a more concrete policy on access to credit is another administration policy goal, according to a White House background call with reporters.
"[O]ne of the things that the president [calls] for is ensuring that we have more bright-line rules for when government will rescind its guarantees to give lenders more clarity, encourage more lending to creditworthy borrowers," one top administration official said.
"One of the challenges now is, we do feel there are too many creditworthy borrowers who are not getting credit, who are not getting the chance to get a mortgage. And so we believe by moving towards a single, clear bright-line system, we can increase the clarity that would open up credit to more and more creditworthy families."
The president is also expected to ask Congress to move forward with the confirmation of Rep. Mel Watt, D-N.C., as head of the Federal Housing Finance Agency – something lawmakers aren't likely to take up until September after they return from their August break.