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ON THE WEB KNOW WEBSITES TO OBAMA LAYS OUT PROPOSALS FOR HOUSING FINANCE REFORM BLOG.THEFIVESTAR.COM The official blog of the Five Star Institute, this site fosters the collaboration of openminded thinkers and experts within the mortgage and real estate communities. Insights, market intelligence, and timely updates are shared by the Institute's executive leadership and its industryshaping partners to advance ideas and initiatives that better the housing industry. GOOGLE.COM/THINK Make the Web work for your business. Google shares its vast research and analysis of digital marketing on its Think website. Filter by industry, marketing objectives, ad type, audience, or region for the latest trends and techniques, data to support your business cases, and ideas for inspiring campaigns to deliver your brand's messages to the right people at the right time. INFOGR.AM Turn your data into a compelling story with Infogram. With just a few clicks, you can create interactive infographics and visually engaging charts to embed in articles, blog posts, or whitepapers; share with colleagues and clients; and publish via social media, email, or on your website—for free. More than a million infographics have been produced since the site launched in 2012. 16 In a speech in Phoenix last month, President Barack Obama stressed the need for a new housing finance system based on specific core principles that include putting private capital first, ending Fannie Mae and Freddie Mac's "failed business model," and ensuring broad access to the 30-year fixed rate mortgage. "Fannie Mae and Freddie Mac should be wound down through a responsible transition, and the government role during normal times should be no bigger than necessary to achieve the principles laid out here," according to a fact sheet released by the While House prior to the president's speech. The call to wind down the GSEs reflects separate housing finance reform bills recently introduced by members of the Senate Banking Committee and the House Financial Services Committee. The key difference between the two chambers' bills is that the House plan would provide for a non-government nonprofit to replace the GSEs, while the Senate bill would replace Fannie and Freddie with a new government agency. To help responsible homeowners refinance, President Obama backs three proposals: 1) streamline refinancing for borrowers with government-insured mortgages, 2) waive closing costs for borrowers who refinance into shorter terms, and 3) expand eligibility for refinancing to those without government-backed mortgages through newly created special programs. The administration estimates families will save about $3,000 a year by refinancing while mortgage rates are still low. Obama also showed support for greater clarity on lending rules to help responsible and qualified families obtain mortgages. The administration contends many borrowers "are denied a loan because lenders are unclear of the rules of the road for lending and are protecting themselves by only lending to those with the most pristine credit." The government fact sheet also stated that between 2000 and 2010, immigrants accounted for almost 40 percent of new homeowners nationwide and more than 80 percent in California. In his speech, Obama stressed the need to fix the "broken" immigration system, which would help to increase home values. The day after his speech in Phoenix, the president took questions from American citizens during a live discussion hosted by Zillow CEO Spencer Rascoff and broadcast online. During the question and answer session, Obama reiterated his stated goals to bring a gradual end to Fannie Mae and Freddie Mac, to return private capital to the housing market, and to ensure access to affordable housing options— both rental and 30-year mortgages. Obama admitted that while it is the American Dream to own a home, not all Americans are in a position to purchase a house, particularly younger Americans with heavy student loans. In fact, Obama said one of the problems that led to the housing crisis was that many Americans who should have been renting were offered mortgage loans instead. Obama plans to combat the housing dilemmas facing young Americans in two ways—by helping ensure affordable rental housing options and by reducing the cost of college. Money that for past generations would have gone toward a down payment on a house is now going to student debt, Obama said. Thus, helping reduce the cost of college will positively impact the housing market by allowing more young people to purchase homes instead of returning to their parents', he said. Obama also discussed plans for the future of housing finance, including scaling back Fannie Mae and Freddie Mac's portfolios and encouraging private capital to enter the market. On the idea of scaling back the GSEs' portfolios, Obama said in most developed countries, the government does not have such a large role in the housing market. "We're actually confident that the private market can step in, do a good job, and the government can be a backstop," he said. "In some ways, it's a return to earlier models."

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