President Obama hailed New York and the U.S.'s comeback from the housing bust on Tuesday, saying it was time to reduce the federal role and risk in the mortgage market "to make sure this kind of crisis we went through never happens again," The New York Times reported.
"For too long, these companies were allowed to make big profits buying mortgages, know that if their bets went bad, taxpayers would be left holding the bag. It was 'heads we win, tails you lose," he said.
The Obama administration has been voicing support to overhaul the two giant mortgage-finance companies that were taken over by the government when they failed in September, 2008. Obama endorsed the legislation by bipartisan Senate members that would "end Fannie and Freddie as we know them."
"First, private capital should take a bigger role in the mortgage markets. I know that sounds confusing to folks who call me a socialist," Obama said "I believe that our housing system should operate where there's a limited government role," he added, "and private lending should be the backbone of the housing market... In the run-up to the crisis, banks and the government too often made everyone feel like they had to own a home, even if they weren't ready and didn't have the payment... That's a mistake we shouldn't repeat... Instead, let's invest in affordable rental housing."
Obama gave his speech in Phoenix, the same place where he announced his ideas for providing relief to homeowners and stemming foreclosures, The New York Times also reported.
"Home ownership for the middle class or those entering the middle class is still - despite the financial crisis - the most significant way of developing inter-generational wealth," said David Berenbaum, chief program officer at the National Community Reinvestment Coalition. "We need to be sure the new system sustains that."
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