Skip to main content

Former Freddie Mac Chief Economist Says Housing Finance Model Can Be Found Outside The U.S.

We're sorry. This audio clip is no longer available. A transcript has been made available.

After the housing collapse of 2008 sent the economy into a downward spiral, the focus turned to housing finance reform.

The mortgage market is almost entirely backed by the government after the housing crisis led to the takeover of the two mortgage giants Fannie Mae and Freddie Mac in an attempt to stabilize the housing market. Meanwhile, lawmakers in Washington continue to debate how to reform housing finance.

Dr. Michael Lea, director of the Corky McMillin Center for Real Estate at SDSU's College of Business Administration was Freddie Mac's chief economist in the 1980s. He'll be heading to Washington next month to testify on housing finance and, more specifically, what to do about Fannie Mae and Freddie Mac. His research centers on how housing is financed in other countries.

Lea said, for instance, in Denmark, housing is financed through a bond market. Lenders issue a bond on behalf of the borrower and purchased directly through the investors.

Several sectors of the U.S. economy are improving since the economic downturn. Employment is up as are housing prices. But the sector that some say started the recession — the housing finance market — is still struggling. The private home lending market has not rebounded and the mortgage market is almost entirely backed by the government, which Lea says is not a good thing.

FEATURED PODCAST

San Diego News Now podcast branding

San Diego news; when you want it, where you want it. Get local stories on politics, education, health, environment, the border and more. New episodes are ready weekday mornings. Hosted by Anica Colbert and produced by KPBS, San Diego and the Imperial County's NPR and PBS station.

  • Need help keeping up with the news that matters most? Get the day's top news — ranging from local to international — straight to your inbox each weekday morning.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Midday Edition banner

KPBS Midday Edition is a daily radio news magazine keeping San Diego in the know on everything from politics to the arts.

Want more KPBS news?
Find us on Twitter and Facebook, or sign up for our newsletters.

To view PDF documents, Download Acrobat Reader.