Why Trump's administration could mean better days for marginal buyers

Changes to regulations and GSEs might make it easier to qualify for a mortgage loan
  • Two things are certain about the 2017 GOP agenda: Federal regulation will be rolled back, beginning with the Dodd-Frank legislation, and Fannie and Freddie will be taken down several notches, perhaps even privatized.
  • A reduced federal role will include the easing of mortgage qualifications. Market forces, especially investors in mortgage backed securities, not government regulations, will reshape housing finance.
  • Marginal borrowers will be better able to get loans. However, they will pay for the increased risk with higher rates, points and mortgage insurance.

For an administration sworn to diminish the role of government, housing is a good place to start. Changes in store on two fronts — privatization of Fannie and Freddie and repeal or major reform of Dodd-Frank regulations — will make it easier for millions of prospective buyers to qualify for a mortgage.