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

  • 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.

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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.