Freddie Mac CEO: Home Price Drops Only 1/3 Done

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 |  Includes: FMCC, FNMA
by: Barry Ritholtz

It's only one man's opinion, but Freddie Mac (FRE) Chief Executive Officer Richard Syron had some rather astounding comments to analysts Wednesday:

- HOME PRICE DROPS "ONLY" ONE THIRD DONE
- WE'RE IN A 100-YEAR STORM IN HOUSING
- US IS IN WORST HOUSING MARKET IN A CENTURY
- APARTMENTS' ROLE IN HOUSING TO BE "MUCH BIGGER"


source: Bloomberg

The most controversial thing Syron was picked up in a Bloomberg report: Federal Rules Let Too Many Poor People Buy Houses, Syron Says.

That is rather inartfully expressed. What I think (or at least hope) he meant was that too many people -- Home owners formerly known as renters -- bought houses they simply could not afford.

Here's the excerpt:

"Freddie Mac Chief Executive Office Richard Syron said he's urging changes in federal rules that enabled too many low- and moderate-income Americans to buy houses they can't afford.

It's "perverse'' that Freddie Mac and Fannie Mae (FNM), the two biggest providers of money for U.S. home loans, have been encouraged "to put people into homes that they end up losing,'' Syron said at a meeting with analysts and investors in New York.

Syron said in an interview that officials at the Department of Housing and Urban Development seem receptive to his suggestions that they change the affordable-housing goals for his McLean, Virginia-based company and Washington-based Fannie Mae.

The goals, which were last updated in 2005, require that a certain amount of the housing units that Fannie Mae and Freddie Mac finance through their overall business and certain sub-segments meet affordable-housing needs."

Hmmm, maybe he and I are referring to different things after all!

Source:
Federal Rules Let Too Many Poor People Buy Houses, Syron Says
Jody Shenn
Bloomberg, March 12 2008