TEXT OF STORY
Steve Chiotakis: Treasury Secretary Tim Geithner is expected to tell members of the House Financial Services Committee that the housing recovery remains pretty precarious. The congressional committee will be asking, should the government be in the business of promoting home ownership? Marketplace’s Nancy Marshall Genzer takes a look.
Nancy Marshall Genzer: For years, the government’s mantra was everybody should own a home. So what should the government do now?
Vince O’Donnell: I don’t think it should the government’s goal to make everyone a homeowner.
Vince O’Donnell is with the Local Initiatives Support Corporation, which focuses on community development.
O’Donnell: Some people don’t have the means to be owners, or the temperament. And the government should not be pushing them in one direction or the other.
Freddie Mac and Fannie Mae are a big part of the government’s home ownership strategy. They buy up mortgages, giving banks more money to lend.
Former investment banker Doug Elliott is now at the Brookings Institution. He thinks Fannie and Freddie fed the housing bubble by buying up so many shaky loans.
Doug Elliott: They have $5 trillion of mortgage risk of various kinds.
Elliot says he thinks Fannie and Freddie should be abolished so they don’t feed another housing bubble. That’s one option to be considered at today’s hearing.
In Washington, I’m Nancy Marshall Genzer for Marketplace.