OBAMACARE... For Home Buying??!!

Market Tinkering Will Destroy ANOTHER Marketplace

Published Monday, November 25, 2013
by Andrew Langer

On Friday, we sent the following letter to the Hill...

ICYMI: Lessons From The Obamacare Debacle –

The Government Takeover Of Insurance


After White House rejection of hedge fund recapitalization plans for Fannie and Freddie (GSEs), the housing reform debate continues. The reforms proposed for housing insurance would radically change the very underpinning of the U.S. housing market.  The Corker-Warner bill liquidating Fannie and Freddie is strikingly similar to those reforms made to our nation’s health insurance through Obamacare. The requirement of mandates and skyrocketing prices are just two that Anthony B. Sanders of George Mason University points out in Housing Finance Reform: Lessons from the Obamacare Debacle (Government Takeover of Insurance).”


In the Corker-Warner bill, an affordable housing mandate is established, requiring the preservation of the 30 year fixed-rate mortgage, even if the consumer wants a pay option adjustable rate mortgage (APR). The current reformers assume you want a 30 year-fixed rate mortgage and require you to contract for it even if you have no intention of paying it back.


Second, just as health insurance premiums are skyrocketing after government involvement, so too did housing prices with the help of government sponsored affordable housing goals. The Corker-Warner bill creates another federal insurance program shackled so heavily to the taxpayer that it is unsustainable and susceptible to collapse and another government bailout. 


Congress should resist the urge to tie mortgages with government mandates and instead allow the free market to set the tone, allowing for individuals to choose which mortgage they prefer. As Mr. Sanders of George Mason University notes, “So, the Affordable Care Act and affordable housing reform are one in the same. Government takeover of insurance companies to require us to purchase something we don’t want — at someone else’s expense.”