I want to begin tonight by expressing our outrage and sadness over the brutal, cowardly acts that took place in Paris. The brutal attack on free speech has left us sickened. To those who perpetrated this and or supported it we caution you that you cannot escape your shadows, and you will pay a severe price. I have often said that the only way to defeat terror is to implement a strategy similar to one the OSS used in World War two where they assassinated influential figures around the world who were either supportive or sympathetic to the Nazi cause. Until we summon the fortitude to crush everyone remotely involved with these cowards, they will not be defeated. That said our prayers go out to the victims and their families.

Now on to the FACT SHEET: Making Homeownership More Accessible and Sustainable http://www.whitehouse.gov/the-press-office/2015/01/07/fact-sheet-making-homeownership-more-accessible-and-sustainable

First I want to point out two key quotes:

Obama 8/6/13 “And one of the key things to make sure it doesn’t happen again is to wind down these companies that are not really government, but not really private sector — they’re known as Freddie Mac and Fannie Mae. For too long, these companies were allowed to make huge profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag. It was “heads we win, tails you lose.” And it was wrong. And along with what happened on Wall Street, it helped to inflate this bubble in a way that ultimately killed Main Street.”

1/7/15 FACT SHEET: Making Homeownership More Accessible and Sustainable
“require more private capital in the system; end the failed Fannie/Freddie duopoly business model in order to improve system stability and better protect taxpayers; ensure broad access for all creditworthy families to sustainable products like the 30-year fixed rate mortgage in good times and bad; and help ensure sustainable rental options are widely available. As in the past, the President stands ready to work with members of Congress in both parties to enact commonsense housing finance legislation based on these core principles.”

First Notice the “wind down” language has been removed, this is a dramatic though unsurprising shift. After what we have witnessed the last several months there was no way Obama would include any mention of winding down Fannie and Freddie. He obviously is not prepared to be entirely truthful and disclose that he has any intentions of a reform/release scenario, but we did not expect that at this time. Basically, all he is saying, is that he would like to see a system created where the duopoly of Fannie and Freddie do not dominate such a large percentage of the market.As I said recently, Obama and others had this almost Utopian dream that private capital could replace Fannie and Freddie, and we could still enjoy all of the benefits that Fannie and Freddie provide. They have since awoken to the reality that this cannot be done which is why the wind down language is gone.
He appears to be hopeful that they can still create a system that would at least bring some private capital in, but I doubt that he is very sincere. Obama knows better than anyone that any chance of major housing finance reform is dead. I also had to chuckle when I noticed the few token references to housing finance reform almost lost amidst the mountain of steps and initiatives he has taken to move the issue so far to the left that any hopes of forging a deal with Republicans has been utterly smashed. As we have said over and over what they say means nothing, you must look at their actions.

To better understand what he means when he states “to end the failed Fannie/Freddie duopoly business model” you must understand a little bit of the history of housing finance in our country. This can be a complicated subject, but we will greatly simplify for our purposes now. As The Savings and Loans share of mortgage funding crumbled with their collapse in the eighties and nineties Fannie and Freddies share increased almost lock step. Since then private capital has not had any success in regaining much of the market share. In the crisis years 02-06, they made an attempt through the massive expansion of PLMBS, this was private capitals version of GSE backed MBS. By 2005, they caught up and in 2006 they overtook Fannie and Freddie.But just as the Savings and Loans before them their predatory lending and high-risk practices ended in utter failure with the collapse of 07-08. Again Fannie and Freddie have dominated this market ever since.

I challenge anyone to present a realistic path that would lead to Fannie and Freddies replacement. It simply dopes not exist which is why we have seen such a dramatic shift to save Fannie and Freddie. Obama is in no big hurry to release them as he does not need one Republican vote to do so. Why bother releasing them now and completely destroy any hopes of accomplishing anything with the new Congress? We had plans to launch our new initiative tonight but wanted to focus on these developments instead. We will be interested to see if Obama adds any further insights in the actual speech tomorrow. Keep the Faith!

Edits: 9:35, 9:53

Let me clarify a few things. First of all I am not suggesting that the fact Obama has chosen to delay the release of Fannie and Freddie is a “good” thing. I think it is yet one more horrifically misguided and ill-informed decision. I was simply trying to explain why they are doing what they are doing. I have said over and over that we cannot take anything they say at face value, and this is no different. How can you come from Detroit where you celebrate the smashing success of the auto industry bailout in which taxpayers lost 9 billion dollars, to go to Phoenix and make no mention of the massive profit that has been made on the GSE bailout? How do you make no mention of the major reforms that have been enacted at Fannie and Freddie to prevent taxpayer losses in a further housing crash? Folks you have to watch what is not said more than what is said in DC these days. Obama knows that if he even hints at the future release of Fannie and Freddie he will invite an absolute firestorm of attacks from the Republicans. I thought it would be wise if he at least mentioned the huge success of the GSE bail out. To ignore it defies all reality.
The fact that our elected leaders have been able to play these games is a direct result of the fact that most of America has no idea whats going on. This must change if we want to expedite the release of Fannie and Freddie. We will be escalating our involvement and hope to take a series of steps to help awaken America to the truth about Fannie and Freddie.

Watch the president live in Phoenix: http://www.whitehouse.gov/live/president-obama-speaks-housing-and-middle-class