Traditional finance systems limited mortgage availability for gig workers, but planned financial reform may open up doors for those with an unconventional yet reliable source of income. Still, options will be limited compared to those with full-time positions and salaries.
Even part-time workers need full-time living spaces.
This month the U.S. Department of the Treasury released a plan to reform the American housing finance system. The Treasury Housing Reform Plan includes nearly 50 recommended legislative and administrative reforms to define a more limited government role within the housing finance system. The reforms are also aimed at preventing taxpayers from catching the bill for future bailouts and promoting increased competition in the housing finance system.
The word from the White House is that executing this proposed plan is “the last unfinished business” from the government takeover of mortgage giants Fannie Mae and Freddie Mac in 2008. Fannie and Freddie don’t actually issue loans themselves; they buy loans from lenders to be packaged into securities that are sold to investors. They also guarantee to return the money if the loan defaults. There are representations and warrants that the lender attests to, such as fraud or loan info integrity, to get their money back so they can lend again. They get matched up with financial entities (such as hedge funds) that wouldn’t be active in home loans without Fannie and Freddie’s help.
Advertisement
Related Stories
Economics
Housing Share of GDP in Q1 2024 Rises Above 16%
The increase marks the first time GDP has surpassed 16% since 2022
Economics
Shelter Costs Drive Inflation Higher Than Expected in January
January Consumer Price Index data show inflation increased more than anticipated as shelter costs continue to rise despite Federal Reserve policy tightening
Economics
Weighing the Effects of the Fed's and Treasury's Latest Announcements
The upshot of the Jan. 31 announcements is that while mortgage rates will stay higher for longer, they're likely to hold steady