Concerns loom as government backs out of private sector
As the federal government looks to lessen its involvement in the private economic sector, some in the housing market say that the industry is inextricably dependent on governmental support. One mortgage firm president, Peter Lansing of Universal Lending, said that the Federal Housing Administration backs more than 80 percent of his mortgages — a sharp climb from the 20 percent of mortgages FHA accounted for during his firm’s boom years. Lansing said that many of his colleagues have a hard time adjusting to the new business reality. “Over 29 years in business, we’ve always thought of ourselves as being in the free enterprise system. Today I think of myself as a government contractor,” Lansing said. “My business strategy is to get more of my employees to embrace that idea.” Higher levels of FHA-insured mortgages, government bailouts for Fannie Mae and Freddie Mac, and the recent $8,000 tax credit incentive for first-time homebuyers has kept a steady stream of government funds funneling into the housing market, according to the Wall Street Journal.