Housing and Urban Development (HUD) Secretary Scott Turner declined to endorse President Trump’s proposal of a 50-year mortgage plan to help reanimate the housing market, stating the idea needed to be studied further before being put forth as a solution to the challenges impacting housing affordability.
In a Sunday appearance on Fox News, Turner was asked about the 50-year mortgage, which the president floated last month at the suggestion of Federal Housing Finance Agency Director Bill Pulte. Turner conspicuously avoided embracing the idea, suggesting it was not ready for a full release.
“It’s very early,” he said. “I think more research needs to be done on a 50-year mortgage and the other ideas that have been put forth. Because — one thing from a HUD standpoint, from my standpoint, we want to make sure that the housing market is secure. And also, for any FHA, Ginnie Mae taxpayer-backed mortgages are stable and secure for the American people. And so, the 50-year mortgage and other ideas that have been circulated through the public are being discussed, are on the table. But at the end of the day, the president and the other leaders in the administration will discuss what’s the best possible path, secure path, to help the American people to afford a home.”
The 50-year mortgage idea generated a wave of backlash from conservatives who claimed it failed to address the challenges facing the housing market. The idea also reportedly sparked anger among White House aides because Pulte pitched the idea directly to Trump without going through the formal vetting process.
The question is can FNMA, Freddie Mac, Sallie Mae Federal Home Loan Bank and other agencies holding federal mortgage guaranties have the funded reserves for market interest volatility and possible increased foreclosures. If we have above normal appreciation via inflation or appreciation then the loan gaps between the mortgage balance and the homes new market value will shrink quicker in a 40 or 50 year mortgage. The 40 to 50 year mortgages are not the complete answer to our housing affordability problem but it could become a small slice of the pie. Dave Ramsey has sage advice usually but not always. He ridiculed the 50 year mortgage. Hey Dave…many people are barely qualifying for a 30 year mortgage. The 10 to 15 year mortgages that you highly endorse are completely unaffordable to many home buyers! If the 30 year mortgage gets additional people into the market then so will the 40 and 50 year mortgage help some more! I’m confused why Scott Turner doesn’t endorse the idea while at the same time lamenting that its a small band aide to the housing problem and that the Trump administration is working on additional measure to address the nation housing shortage.