The government will have to continue its involvement in the housing and mortgage markets, as the industry forecast for the next year remains dreary, said Freddie Mac CEO Charles E. Haldeman Jr. at the annual Mortgage Bankers Association convention, according to a report by the Wall Street Journal.
In order to keep the mortgage market afloat, the government currently backs nearly nine out of ten new loans. It also has made efforts to keep mortgage rates low and ensure access to low down payment mortgages through the Federal Housing Administration, Fannie Mae and Freddie Mac.
“We will need the same kind of government involvement as we have right now,” said Haldeman at the conference. “I don’t think there will be any serious disengagement.”
The federal government took over mortgage giants Fannie Mae and Freddie Mac more than two years ago though the process of conservatorship. According to the report, the Obama administration promised that it would release how it intends to overhaul both Fannie Mae and Freddie Mac as part of its plan to reinvigorate the housing market as a whole.
Haldeman commented that without a plan, his company risks lower morale and losing employees. He also defended the mortgage industry, saying “I can’t imagine being quote ‘prepared’ for” the overwhelming amount of foreclosures the industry was forced to deal with.