White House looks to housing policy fixes

The Obama administration, which last year adopted a laissez-faire attitude toward the housing market, is now turning its attention reviving the market because of its drag on the economy in general, reported the Wall Street Journal.

Advisers are showing renewed interest in housing-policy fixes that were dismissed last year; weak housing demand and more foreclosures are putting pressure on home prices and thus on the White House.

Housing "hasn't bottomed out as quickly as we expected," President Barack Obama said at a White House town hall last week. Mr. Obama said housing remained the "most stubborn" problem facing the country and conceded that a raft of federal mortgage-aid programs were "not enough, and so we're going back to the drawing board."

Policy ideas include having taxpayer-owned mortgage giants Fannie Mae and Freddie Mac relax their rules for loans to investors, allowing those buyers to sweep up excess housing inventory. In certain markets, Fannie and Freddie could hold some foreclosed homes off the market and rent them out to ease the property glut.

Officials also could enhance incentives for banks to reduce loan balances for borrowers who are underwater, or owe more than their homes are worth.

Discussions are in early stages, and there is no consensus around particular ideas.

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