To revitalize the mortgage market, Rep. Barney Frank of Massachusetts said two of the country’s largest mortgage companies should be abolished. The Democratic congressman’s comment came after Treasury Secretary Timothy Geithner hosted a conference of industry leaders in Washington as part of efforts to reform the $10.7-trillion mortgage market.

Frank stressed that the government should be prioritizing other housing projects instead of spending more taxpayer’s money on the rehabilitation of the Federal National Mortgage Association and the Federal Home Mortgage Corp. The two government-sponsored enterprises, popularly known as Fannie Mae and Freddie Mac, respectively, reportedly received at least $150-billion worth of financial aid from the government.

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The Federal Home Loan Mortgage Corp. (Freddie Mac) has reported a new record-low on U.S. mortgage rates.

According to the McLean, Virginia-based mortgage finance company, rates slumped for the ninth straight week to 4.42% for a 30-year fixed mortgage. It was down from the previous week’s 4.44% and is the lowest since Freddie Mac started gathering the date in 1971. Meanwhile, the rate for a 15-year mortgage stood at 3.9%.

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It looks like more than a quarter of the country’s renters do not believe in the American Dream of homeownership despite record low mortgage rates and declining home prices.

A survey conducted by real estate search site Trulia.com revealed that 27% of Americans who are currently renting houses and apartments have no plan of over buying a home of their own. Although majority of respondents are still expected to buy houses eventually, the percentage of potential buyers fell from 77% to 72% from half a year ago. The survey also revealed that two thirds of those who want to buy homes are likely to wait at least two years before pursuing their plans.

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Homeowners were less confident on the value of their properties in the second quarter of the year, the latest survey by real estate website Zillow showed.

One in three homeowners believes that the market where their property is located has yet to reach rock bottom.  The number of homeowners who believe that their local market has already bottomed out is five percentage points higher.

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The government wants initiate “fundamental change” in the $10.7-trillion mortgage market, particularly the two government-sponsored enterprises (GSEs) saved by taxpayers’ money from insolvency.

U.S. Treasury Secretary Timothy Geithner, who hosted a conference on possible measures on the mortgage market reform, said that regardless of what system will be placed in the future, “it is not tenable to leave in place the system we have today.”

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Housing starts failed to live up to market expectations as home building rose at a much slower pace in July, government data showed.

According to a report released by the Department of Commerce early this week,  housing starts jumped by 1.7% to a seasonally adjusted annual rate of 546,000 units last month, 14,000 units short of market expectations. Although starts of construction for single family homes fell by 4.2% to their lowest level in more than a year, multifamily home starts soared by 32.6% during the same period.

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Home builders are becoming more pessimistic on the recovery of the housing market as the index measuring their confidence levels fell for the third-straight month in August.

According to the National Association of Home Builders, its monthly index of builders’ housing market sentiment fell to 13 points, the lowest since March last year. The index, which is broken into three separate readings, also showed that market expectations for the next six months dropped by three points to 18, while sentiment for current sales conditions fell by one point to 14. Builders’ confidence on foot traffic from prospective buyers, on the other hand, remained at 10 points.

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Talks to reform the mortgage industry will start today with a conference hosted by the Treasury Department.

The event is expected to gather solutions for reorganization of the $11 trillion mortgage market, including the possibility to minimizing government involvement in the industry. It is also likely to touch on what could be done with mortgage giants Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corp).

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Despite the country’s worsening job market and growing foreclosure rate, many real estate experts believe that the worst is over for the housing market, a recent survey showed.

According to a poll conducted by Reuters, most market analysts and economist believe that a double-dip in the housing market is quite impossible. David Wyss, chief economist at Standard & Poor’s Ratings Services, shared the same sentiment. He said that although home prices today are still considerably lower as compared to prices during the housing boom a few years ago, the housing market is in better shape than before.

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If new rules are approved as expected this month, first-time home buyers are likely to face more challenges when applying for a Federal Housing Administration (FHA) backed loan.

The new rules, which include larger down payments and higher monthly fees, are meant to beef up the FHA’s reserves. The reserves are used to settle bad loans. In a report, the Department of Housing and Urban Development said FHA’s reserves stand at only $3.5 billion – a far cry from the $19.3 billion it held in September 2008.

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