Obama planning to ensure wide access to 30-year mortgages
US President Barak Obama is working on measures to ensure that the 30-year mortgages are widely accessible to the US public, which is not generally available in other countries.
The president had earlier called for shutting Fannie Mae and Freddie Mac, the two financial giants that have been offering 30-year mortgages for generations. Most banks appear unwilling to offer loans for such a duration without any backing from the government. A group of senators in the US congress are set to complete a plan to liquidate Fannie Mae and Freddie Mac (FMCC) and replace the failed bank with a government reinsurer of mortgage securities with private capital.
The new plan would require private financiers to accept first-loss position for covering steep losses, according to the draft of the plan. The senators are planning to introduce the plan within this month for the plan to be implemented soon. The bill has been written by Tennessee Republican Bob Corker and Virginia Democrat Mark Warner.
Experts have said that the government is working to create an alternative where the government might have to repay lenders if another housing market collapse happens in the future.