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The Biden administration has a remarkable opportunity to reshape homeownership in America. In the coming days, administration officials are expected to announce the appointment of a key regulator who will have a lot of power to change the US $ 11 trillion mortgage market. For a chat, we’re now joined by Chris Arnold from NPR.

Hi Chris.


FADEL: So Chris, key housing regulator – tell us about this powerful position.

ARNOLD: Well, the administration is about to announce its candidate for the post of director of the Federal Housing Finance Agency. Now I know a lot of people say, what is this guy? I never heard that. But he controls Fannie Mae and Freddie Mac, and they’re at the heart of America’s massive, multi-billion dollar mortgage market. They have a lot of control over who can qualify for a mortgage and at what price. And property, we know, is the most powerful way for Americans to build wealth in their lifetimes. And because of the rules that were put in place after the Great Recession, the head of this agency has almost one-sided control to change policies or launch all kinds of new initiatives.

FADEL: OK, so who do we intend to be the candidate?

ARNOLD: Well, you never know with these things. But sources tell me it’s between Acting Director Sandra Thompson – she once worked at this agency, and before that she was a banking regulator working in risk management and consumer protection, so many years in government. The other is Mike Calhoun. He’s the longtime head of the nonprofit Center for Responsible Lending – so also decades of experience, but more of a watchdog pushing for change from the outside. Neither had a comment. But whoever it is, they will have many powerful levers they can pull to reshape homeownership.

FADEL: Okay. You say reshaping homeownership. Give us some examples of what could be done here that would make a big difference.

ARNOLD: Honestly, there are so many things, but OK. Take the 30 year mortgage that everyone is familiar with. It is quite outdated. You know, people are moving more than before. They don’t build up a lot of equity in five or ten years with that mortgage. And there are ways to make 15 and 20 year mortgages much more affordable that mean a lot more to people. You could do things like tackle climate change – right? – I mean, better mortgage rates if you have solar panels on the roof and stuff like that. They could help the lowest income homeowners in America – you know, the people in the mobile home parks – get loans at a lower cost. And, of course, another really big issue that people – people are talking about lately is racial inequalities in housing.

FADEL: Yes. I mean, a study after the next study confirms the racial disparity between who gets a mortgage and who doesn’t. So what changes might we see there?

ARNOLD: I mean, the gap between black and white homeownership rates – it’s, like, the biggest since the 1960s, so it’s really bad. Andre Perry with the Brookings Institution – he’s studying that. He says there are a lot of things Fannie and Freddie could do without having to go through Congress.

ANDRE PERRY: I’m thrilled because if Biden is serious about closing these racial wealth gaps, improving homeownership rates, he will find a leader who will make the necessary changes.

ARNOLD: One thing Fannie Mae just did was they go and see, you know, if people pay their rent to their landlord on time? It’s, like, a new metric. Lots of other things could be done, however, too, Leila – money to help with the down payments. And those two things would help a lot of people, but especially black and Latino homebuyers, because they tend to have less family wealth.

FADEL: So whoever is chosen will have to face confirmation from the Senate, a Democratic candidate. So what are the Conservatives saying?

ARNOLD: I talked about it with – about this with Ed Pinto with the conservative American Enterprise Institute. He worries, looks; you know, what has been tried before has often not worked.

ED PINTO: When the federal government tries to make housing more affordable, it does so by making it easier to get loans. It just drives up the prices.

ARNOLD: But Fannie and Freddie could help build more houses – you know, loans to home builders and help them buy land. So there are all kinds of things that can happen. But a lot depends on what the new director wants to focus on and do.

FADEL: Chris Arnold of NPR.

Thank you.

ARNOLD: Thank you, Leïla.


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