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MortgagePoint ยป Your Trusted Source for Mortgage Banking and Servicing News 40 July 2024 C O V E R S T O R Y On the other hand, budget proposals from the Trump administration called for cuts to government-funded housing aid pro- grams, the Trump administration got rid of an Obama-era rule meant to reduce hous- ing discrimination, and it imposed tariffs on Canadian lumber (something that can make building homes more expensive). Generally speaking, housing policy does not appear to be a main priority for Donald Trump. Because of that, it is difficult to say what he has planned for the housing market/broader mortgage industry should he win another term. Given his past administration's actions, common Repub- lican housing proposals, and comments he has made that make it seem like he is not a fan of things like low-income housing, my assumption is that Trump would try to deregulate the mortgage industry and oth- erwise gut government housing programs should he win in November. Deregulation and less government involvement may be met with open arms by some within the mortgage industry, though I would argue that wanton deregulation often does more harm than good. For exam- ple, the deregulation that led to mortgage standards becoming too lax in the early 2000's was a major driver behind the Great Recession. While a housing crash does not necessarily seem likely in the next four years regardless of who wins, I would say the likelihood of it would be higher should we see a second Trump term bring with it a lot of deregulation and the end of a number of government aid programs. Of course, even if Trump does win and attempt to make serious housing-related changes, he will likely run into the same issues stemming from congressional inac- tion as Biden would. This might mean the broader market remains unchanged, albeit slightly more affordable than it is now. Larry Goldstone: A return to the White House by Donald Trump gets a lot more interesting based on various statements he has made. First, I would expect him to begin to push hard to influence the Federal Reserve. In fact, I suspect that if it is a Republican Congress as well, then the independence of the Fed is going to be called into question, if not stripped away. I also expect that he will be seeking to replace [Federal Reserve] Chairman Powell as soon as he can. Mr. Trump wants to pursue a dovish policy regarding rates in hopes of further stimu- lating growth. In the near term, that could bode well for housing affordability, but it will only exacerbate the housing shortage. Second, I suspect that FHA and VA programs might be reined in, as they have created a moral hazard opportunity for homeowners. So many homeowners have figured out that they can live in their homes and make no mortgage payments and live that way for years. Mr. Trump might close that loophole. Third, I think that a Trump adminis- tration would like to try to find a way to release the GSEs from conservatorship. Depending on how that is done, I suspect that it will be a windfall for the wealthy, who buy and large are still shareholders of the GSEs. I am not sure I agree with that outcome, but I do not like the government using the GSEs as a tool to administer some policy objectives related to housing and home price affordability. Rick Sharga: Based on his first term in office, it seems likely that a second Trump administration would focus on removing some of the regulatory hurdles faced by builders in an attempt to encourage them to build more homes, more quickly, and in more places. It is possible that the admin- istration would attempt an expansion of the QOZ program (Qualified Opportunity Zones program) that was enacted with some success, providing tax incentives for investors and developers to build housing in underserved and economically chal- lenged communities.