IMF Urges U.S. to Be Explicit on Housing Finance Guarantee

[dkf]

The Washington-based agency said that “significant uncertainty and vulnerability” remain in the U.S. mortgage market, which will require government backing for securitized mortgages. It also called for the U.S. to press ahead with plans to phase out Fannie Mae and Freddie Mac, the government-backed mortgage companies that have been in conservatorship since 2008.

“The challenge will be to strike the right balance between delivering an appropriate level of government participation and discouraging another cycle of overinvestment,” the IMF said today in its Global Financial Stability Report. The fund welcomed the Obama administration’s housing-finance plan and said improvements in the U.S. housing finance system would bolster global stability.

The U.S. didn’t tackle tax deductions for mortgage interest in its housing plan, which the IMF said was a mistake. The deduction should be lowered or at least capped, IMF staff recommended in a press conference today.

“We would like to see it reduced,” said Laura Kodres, chief of the IMF’s global stability analysis division. She said any changes would need to be phased in gradually to avoid penalizing homeowners unfairly.


http://www.businessweek.com/news/2011-04-06/imf-urges-u-s-to-be-explicit-on-housing-finance-guarantee.html

[AlabamaLibrul]

1. IMF wants a global third world

cut mortgage deductions, of all things, while going ahead and making that "down payment" on austerity in the form of even further cuts to social programs.

[mmonk]

3. Yep. It wants to continue the shock doctrine.

[leveymg]

2. Chile was the experiment. Then came Russia, Greece and Ireland followed. Now, it's our turn.

Yes, it's all about "restructuring." Lose your Empire, do not pass Go. Do not receive your Get Out of Jail Free card. Well, that last token still gets handed out to past Presidents and their intelligence services.

[dkf]

4. Well this is what is in store for us if we can't get our act together.

I'm not hopeful that we will escape this fate, especially after seeing the knives the sides go at each other with.