Editor's note: This is Part 1 of a multipart series.The document the administration recently sent to Congress outlining its game plan for housing finance has both scale-down and ramp-up thrusts. The scale-down thrust, comprising most of the report, involves shrinking the federal government's involvement in the market.The ramp-up thrust would create a new federal program designed to support the private market. This article is about the scale-down. Backdrop The point of departure for this proposal is a post-crisis housing finance system in which only about 10 percent of all new home loans are strictly private. The remaining 90 percent are either acquired by Fannie Mae or Freddie Mac, or insured by the Federal Housing Administration (FHA). Further, qualification requirements set by t...
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