A new future awaits America`s mortgage industry

• The conference will take place on August 17
• A wide spread of interest groups are expected to attend
• Whose politics will dominate?

The fluctuating fortunes of President Obama’s making homes affordable program have begun to seriously affect the general reputation of the current administration. Sober-minded market analysts are joining opposition politicians in pointing out that the initiative has started running out of steam before making any serious inroads into the problem that it was supposed to fix.

To make things a little bit more embarrassing for Washington, its own charges Fannie Mae and Freddie Mac have recently begun to take the lead in the tougher foreclosure stakes, and their tarnished images are mapping across to President Obama too. Part of the claw-back strategy is the recently announced Washington housing conference announced on the back of Financial Reform legislation just signed into law.

The Administration is holding this important event on August 17 to debate the future of American housing finance in general, and to find ways to fix the nation’s giant mortgage lenders Freddie Mac and Fannie Mae as well. Officials are hoping that it will produce the much-needed capstone that will pull the disparate efforts of HAMP and other programs into a cohesive structure. Representatives from the lending industry are expected to include a wide spread of consumer groups, bankers and housing advisers.

Part of the platform of the previous administration under President George Bush was to increase private ownership of homes. To achieve this, they pressurized Fannie Mae and Freddie Mac to lower lending hurdles. This in turn encouraged Wall Street to develop financial models that overlooked traditional market comforters. A bounteous bubble of finance emerged that crashed as soon as the economy began to turn.

Opposition Congressmen have argues that Obama’s failure to deal effectively with the ensuing crisis harmed the longer term financial futures of several hundred thousand American families. If true, then this could become the landmark political liability of the new, younger President. His supporters prefer to blame a long legacy of questionable lending practices, corruption and worse fraud in the previously respected corridors of Wall Street.

Treasury Secretary Tim Geithner is upbeat about the post-conference future. “The Obama Administration is committed to delivering a comprehensive reform proposal that protects taxpayers, institutes tough oversight, restores the long-term health of our housing market, and strengthens our nation’s economic recovery,” he is quoted as saying. His Department already working on its own proposals for the conference, following which Congress is scheduled to review a reform package in January 2011.

America will hold its breath on August 17 when the housing conference kicks off. What will President Obama’s opening remarks reveal? What will the response of the major banks be? In the end, will America’s citizens be the winners? We will have to wait and see.

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