The end of homeowner America?

Obama's Treasury Department will propose "a significant reduction in the government's role in the housing market" in a report later this week, analysts Edward Mills and Paul J. Miller Jr. at FBR Capital Markets told clients in a report.

In 2009-10, trouble home finance giants Fannie Mae and Freddie Mac, the Federal Housing Administration and the Veterans Administration were "involved in more than 90%" of US mortgages. Mills and Miller expect government support will shrink to about half of all home deals, as Democrats who long defended Fannie and Freddie from critics face the "hot seat" in GOP-led hearings in Congress.

Should all Americans be homeowners, as Clinton and Bush suggested? "There has been a shift among policymakers to call for increased support of affordable rental housing," Mills and Miller say. So Treasury "will offer options on how to better support the development of multifamily housing and affordable rental units."

Treasury may recommend government guarantees for fewer big-home "jumbo" mortgages, and maybe smaller home loans in general; and maybe much stricter limits on what a government-backed "qualified residential mortgage (QRM) will be."

It will take at least five years to implement real changes, they estimate. Good time to go into the apartment business, maybe.

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