Top advisors in President Barack Obama’s administration are working on a proposal that would have the government continue to play a role in the nation’s mortgage market, extending a federal loan subsidy for most home buyers, the Washington Post reports.
According to sources close to the matter, the decision follows advice from senior economic and housing advisers, who favor maintaining government’s role as an insurer of mortgages for most borrowers. The approach under consideration could preserve Fannie Mae and Freddie Mac, the mortgage finance giants owned by the government, although under different names and with significant new constraints.
