A Bloomberg News interview with Department of Housing and Urban Development Secretary Shaun Donovan stresses the importance of housing issues with respect to the greater economy, and expresses a need for the private sector to come back into housing financing market and take some of the onus off of the Federal Housing Administration.
“When more than 90% of new loans are insured by the government, we don’t have a vibrant enough private sector,” Donovan said in the interview. “The key is: How do we keep the right federal role but start to step back? That’s what we’ve started to do.”
Donovan noted an increase in prices at FHA, and taking critical steps at Fannie Mae and Freddie Mac to shrink their market share. “We need to make the government footprint in housing smaller,” he said.
In looking back on the housing crisis, Donovan noted some warning signs, including the consistent increase in home prices, that should have been recognized sooner. He also pointed to the safe lending that has been available to millions of homeowners through FHA throughout the crisis.
“It’s been a safe, strong consistent presence. We don’t get a lot of attention for that, because it’s generally good news,” he said
View the Booomberg news interview.
Written by Elizabeth Ecker
