Trade Agreements Finally Poised to Create Jobs

After almost 1,000 days of sitting on three job-creating Free Trade Agreements (FTAs) with Colombia, South Korea and Panama, President Obama finally submitted the FTAs to Congress on October 3rd.[1] Only two days after receiving the FTAs from the President, the House Ways and Means Committee passed all three with bipartisan majorities.[2] Less than a week later, the Senate Finance Committee also passed all three FTAs with bipartisan majorities,[3] and on October 12th, both the House and Senate are scheduled to vote on all three FTAs -- less than 10 days after presentation by the President.

 

Trade with our current FTA partners supports almost 18 million U.S. jobs.[4] When the U.S. enters into new trade agreements, exports to those countries have historically grown fourfold in the first five years.[5] With 80 percent of the world’s purchasing power outside the U.S.,[6] trade agreements are necessary for future U.S. growth. President Obama’s delay has cost Americans hundreds of thousands of good jobs during a time of economic hardship.[7]

 

Korea Free Trade Agreement

The Korea Agreement will increase U.S. exports by $10-11 billion per year.[8] In 2010, Korea was the fifth-largest market for U.S. agricultural goods. This FTA will eliminate most Korean tariffs and quota tariffs, and open many sectors to U.S. exports, including autos, which had limited market access traditionally.[9] Increased U.S. exports to Korea would vastly outweigh increased Korean imports.[10]

 

Colombia Free Trade Agreement

The Colombia Agreement will increase U.S. exports by more than $1.1 billion per year.[11] Currently, U.S. goods face an average 12.5 percent tariff going into Colombia; this FTA will eliminate the majority of those tariffs immediately and eventually remove 99 percent of the tariffs.[12] Historically, Colombia has been the largest U.S. agricultural market in Latin America; however, U.S. exports fell 50 percent between 2008 and 2010 as U.S. exporters waited for this FTA while other nations entered into agreements with Colombia.[13] The Colombia FTA will result in a $2.5 billion increase in the U.S. GDP.[14]

 

Panama Free Trade Agreement

The Panama Agreement will increase U.S. exports of grain to Panama by 61 percent, and exports of cars and light trucks by 43 percent.[15] This FTA will eliminate the majority of Panamanian tariffs on American products immediately and eventually remove 99 percent of the tariffs.[16] American agricultural exports to Panama will increase by 20-46 percent.[17]

 

These three trade agreements will provide American exporters the same benefits foreign competitors already possess. Korea and Colombia already have, or are negotiating, trade agreements with other nations, including the EU, Canada, and each other.[18] Failure to implement U.S. trade agreements could result in $40 billion worth of exports lost to our competitors.[19] We must act; on a level playing field, American can compete and win.

 

After fast action by Congress, we will be left with a lingering question: How many American jobs were lost in the nearly 1,000 days that the President played politics with the Free Trade Agreements?

 

________________________

 

1 Statement from President Obama on the Submission of the Korea, Colombia, and Panama Trade Agreements, October 3, 2011, http://www.whitehouse.gov/the-press-office/2011/10/03/statement-president-obama-submission-korea-colombia-and-panama-trade-agr.

2 Camp Statement on Committee Approval of Free Trade Agreements, http://waysandmeans.house.gov/News/DocumentSingle.aspx?DocumentID=263129.

3 The Colombia FTA passed Committee 18-6 and both the Panama and Korea FTAs passed by voice vote, http://finance.senate.gov/hearings/hearing/?id=611b68e1-5056-a032-52e9-e785d6525dd1 beginning at 74:30.

4 “Opening Markets, Creating Jobs: Estimated U.S. Employment Effects of Trade with FTA Partners,” by Laura M. Baughman and Joseph F. Francois, May 14, 2010, U.S. Chamber of Commerce, http://www.uschamber.com/sites/default/files/reports/100514_ftajobs_full_0.pdf.

5 “Myths and Facts: Trade Agreements, Deficits, Jobs and Growth,” http://www.chamberpost.com/2011/05/myths-and-facts-trade-agreements-deficits-jobs-and-growth.

6 Letter from National Association of Manufacturers to the President’s Council of Advisors on Science and Technology, April 20, 2010, http://www.nam.org/~/media/D3A22734DDDB4249AA61E6AD1A7B78E6/PCASTfinal.pdf.

7 “Trade Action – or Inaction: The Cost for American Workers and Companies,” by Laura M. Baughman and Joseph F. Francois, September 15, 2009, U.S. Chamber of Commerce, http://www.uschamber.com/sites/default/files/reports/uscc_trade_action_inaction_study.pdf.

8 “The Proposed U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implications,” CRS Report RL34330, October 4, 2011, http://www.crs.gov/Products/RL/PDF/RL34330.pdf.

9 “Agriculture in Pending U.S. Free Trade Agreements with South Korea, Colombia, and Panama” CRS Report R40622, October 6, 2011, http://www.crs.gov/Products/R/PDF/R40622.pdf.

10 “U.S.-Korea Free Trade Agreement: Potential Economy-wide and Selected Sectoral Effects” USITC Publication 3949, September 2007, http://www.usitc.gov/publications/docs/pubs/2104F/pub3949.pdf.

11 “Proposed U.S.-Colombia Free Trade Agreement: Background and Issues,” CRS Report RL34470, October 4, 2011, http://www.crs.gov/Products/RL/PDF/RL34470.pdf.

12 “U.S.-Colombia Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects” USITC Publication 3896, December 2006, http://www.usitc.gov/publications/docs/pubs/2104F/pub3896.pdf.

13 “AFBF Advocates Passing FTAs at World Trade Month Event,” American Farm Bureau Federation, May 24, 2011, http://www.fb.org/index.php?action=newsroom.news&year=2011&file=nr0524.html.

14 “U.S.-Colombia Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects” USITC Publication 3896, December 2006, http://www.usitc.gov/publications/docs/pubs/2104F/pub3896.pdf.

15 “The Proposed U.S.-Panama Free Trade Agreement” CRS Report RL32540, October 6, 2011, http://www.crs.gov/Products/RL/PDF/RL32540.pdf.

16 “U.S.-Panama Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects” USITC Publication 3948, September 2007, http://www.usitc.gov/publications/332/pub3948.pdf.

17 “Agriculture in Pending U.S. Free Trade Agreements with South Korea, Colombia, and Panama” CRS Report R40622, October 6, 2011, http://www.crs.gov/Products/R/PDF/R40622.pdf.

18 Information on Free Trade Agreements available at the World Trade Organization’s Regional Trade Agreements Information System, http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx.

19 “Trade Action – or Inaction: The Cost for American Workers and Companies,” by Laura M. Baughman and Joseph F. Francois, September 15, 2009, U.S. Chamber of Commerce, http://www.uschamber.com/sites/default/files/reports/uscc_trade_action_inaction_study.pdf.

UPDATE: He’s Making It Worse

VIDEO: The America Invents Act: Turning Ideas into Jobs

Last Friday, President Obama signed the America Invents Act. This historic legislation will help American entrepreneurs and businesses get their inventions to the marketplace sooner so they can turn their ideas into new products and new jobs.

Ron Paul Campaign Issues Response to Obama’s Jobs, Deficit Plan

“A $1.5 trillion tax hike will do nothing to help us out of this mess”

LAKE JACKSON, Texas – The Ron Paul 2012 Republican presidential campaign has released a statement in response to President Obama’s speech outlining his proposed jobs and deficit plan. See statement from Ron Paul 2012 National Campaign Chairman Jesse Benton below.

“President Obama’s job creation and deficit reduction plan will do nothing to combat joblessness or reduce the crushing debt that the federal government has accumulated and is still accumulating.

“That’s because when the President starts targeting the so-called rich, he’s really targeting small business owners, so ultimately he’s threatening the little guy.  The President’s plan, then, will result in a fatal broadside to the national economy from Main Street on down.

“The President’s class-baiting rhetoric categorizes Americans into opposing groups and pits them against one another, purely for his own political gain. This gets us nowhere as a nation, and nowhere closer to solving our economic problems.

“A $1.5 trillion tax hike will do nothing to help us out of this mess we’re in, and will more than likely create more problems, lead to less investment, and cause more job loss at a time when Americans of all kinds are hurting.

“President Obama and his administration refuse to confront the realities of our situation and the actions that are necessary. We must reduce spending, instead they pretend that the budget can be balanced and prosperity restored by increasing spending and taxes.

“Instead of raising taxes, this administration should cut corporate welfare, foreign welfare and end the trillion dollars overseas wars by bringing troops home.

“These would be sound policy actions, the kind that create prosperity and engender greater freedom. These are the kind of policies that a President Ron Paul will advocate for and institute to restore limited government principles and a strong America.”

Fast Facts: Obama’s Failed Stimulus, The Sequel

Then: Shortly after taking office, President Obama promised his $825 billion stimulus would “save or create more than 3.5 million jobs.”

Now: Last week, President Obama said his latest $447 billion stimulus “answers the urgent need to create jobs right away.”

However: One economic indicator after another – job creation most importantly – shows the President’s first stimulus failed.

Instead: President Obama should abandon the failed policies of more taxes, more spending, and more debt and work with Republicans to:

·         approve the free trade agreements currently sitting on his desk;

·         put an end to job-killing regulations that are holding employers back; and

·         enact permanent pro-growth tax policies that provide certainty for job creators.

Here's how the American Jobs Act works

Good afternoon,

Last night President Obama walked Congress and the nation through the American Jobs Act, his plan to create jobs in America now. It's up to Congress to act on this set of bipartisan ideas that put people back to work and put more money into the pockets of working Americans.

You can watch a special enhanced version of the speech, featuring charts and other relevant information here.

Here are a few important points about how the American Jobs Act works, and why Congress should act quickly:

·         First, it provides a tax cut for small businesses, not big corporations, to help them hire and expand now and provides an additional tax cut to any business that increases wages.

·         Second, it puts people back to work, including teachers, first responders and veterans coming back from Iraq and Afghanistan, and construction workers repairing crumbling bridges, roads and more than 35,000 public schools, with projects chosen by need and impact, not earmarks and politics.

·         Third, it helps out-of-work Americans by extending unemployment benefits to help them support their families while looking for work and reforming the system with training programs that build real skills, connect to real jobs and help the long-term unemployed.

·         Fourth, it puts more money in the pockets of working and middle class Americans by cutting in half the payroll tax that comes out of every worker's paycheck, saving families an average of $1,500 a year. And it removes the barriers that exist in the current federal refinancing program (HARP) to help more Americans refinance their mortgages at historically low rates, save money and stay in their homes.

The American Jobs Act is based on ideas supported by both Democrats and Republicans, and is fully paid for by closing corporate tax loopholes and by asking the wealthiest Americans to pay their fair share. It would have an immediate impact on job and economic growth, but Congress has to act now.

You can learn more about the American Jobs Act on Whitehouse.gov.

Over the next few days there are a number of ways for you to ask questions and engage with Administration officials about the American Jobs Act including Open for Questions live panels and Twitter Office Hours.

In fact, next week, I’ll be participating in my very first White House Office Hours on Twitter, so be sure to tune in and send me your questions using the hashtag #WHChat.

Sincerely,

David Plouffe

Senior Advisor to the President

P.S. After last night’s address, a few White House policy experts answered questions about the speech. Check out the video of the event at WhiteHouse.gov/JobsSpeechOFQ.

VIDEO: American Jobs Act: Get the Facts

By Colleen Curtis

This evening, the President addressed a joint session of Congress and presented the American Jobs Act, a comprehensive plan to put America back to work. It was created from a set of ideas supported by both Democrats and Republicans, and it acknowledges that if we are going to restore America's middle class, we need to rebuild the economy the American way, based on balance, fairness and the same set of rules for everyone from Wall Street to Main Street.

Viewers who tuned in to watch it live-streamed from whitehouse.gov/live got an enhanced experience, one that included real time graphic elements that explained the research and the facts that helped inform some of aspects of the American Jobs Act. And now you can watch it that way, too.

You can download the fact sheet here.

UPDATE: He's Making It Worse!

UPDATE: He's Making It Worse

U.S. Department of the Treasury Announces Funds to Spur $3.6 Billion in New Lending to Small Businesses, Help Create Jobs

WASHINGTON, D.C. – Today, the U.S. Department of the Treasury announced the approval of applications for State Small Business Credit Initiative (SSBCI) funding from 11 states and Washington, D.C.  This funding will help create new private sector jobs and spur more than $3.6 billion in additional small-business lending. The SSBCI, which supports state-level, small-business lending programs, is an important component of the Small Business Jobs Act that President Obama signed into law last fall.

“These funds will provide critical support to state-level programs that help expand small-business lending and spur private sector job growth,” said Deputy Secretary of the Treasury Neal S. Wolin. “Unlocking credit for small businesses will provide a powerful boost for investment and job creation in local communities across the country.”

Under the Small Business Jobs Act, these 11 states and Washington, D.C. can access a collective total of $360 million in SSBCI funds. These states and Washington, D.C. expect to generate a minimum “bang for the buck” of at least $10 in new private lending for every $1 in federal funding. As such, this $360 million allocation is expected to support more than $3.6 billion in new private lending.

The applications for SSBCI funding that were approved as part of today’s announcement include those submitted by Alabama ($31.3 million), Florida ($97.7 million), Idaho ($13.2 million), Iowa ($13.2 million), Louisiana ($13.2 million), Mississippi ($13.2 million), Ohio ($55.1 million), Oregon ($16.5 million), Tennessee ($29.7 million), Texas ($46.6 million), Virginia ($18.0 million), and Washington, D.C. ($13.2 million).

Under the SSBCI, all states are offered the opportunity to apply for federal funds for state-run programs that partner with private lenders and investors to increase the amount of credit available to small businesses. States must demonstrate a reasonable expectation that every $1 in federal funding will generate a minimum of $10 in new private lending.  Accordingly, the overall $1.5 billion federal funding commitment for this program is expected to result in at least $15 billion in additional private lending nationwide.

For more information about the SSBCI, please visit link. More information on the applications that were approved as part of today’s announcement is included below:

Alabama -- $31.3 million

Treasury will allocate a total of $31,301,498 to Alabama under the SSBCI. The Alabama Department of Economic and Community Affairs will use these funds to launch three new small business lending programs: the Alabama Capital Access Program, the Alabama Loan Guarantee Program, and the Alabama Loan Participation Program. 

Florida -- $97.7 million

Treasury will allocate a total of $97,662,349 to Florida under the SSBCI.  Florida’s Office of Tourism Trade and Economic Development will partner with Enterprise Florida, Inc., a public-private economic development partnership, to launch the Venture Capital Program, which will make equity investments in small businesses, and the Florida Small Business Loan Support Program. Additionally, the Office of Tourism Trade and Economic Development will launch the new Florida Capital Access Program to spur small business lending by private sector lenders.

Idaho -- $13.2 million

Treasury will allocate a total of $13,168,350 to Idaho under the SSBCI.  Idaho’s Department of Commerce will partner with the Idaho Housing and Finance Authority to support the Idaho Collateral Support Program. 

Iowa -- $13.2 million

Treasury will allocate a total of $13,168,350 to Iowa under the SSBCI.  The Iowa Department of Economic Development (IDED) will use these SSBCI funds to support the launch of the Iowa Capital Access Program, and to provide additional funding for two existing programs: the Iowa Demonstration Fund Program, a venture capital program; and the Iowa Small Business Loan Program, a microloan program. The Iowa Business Growth Corporation will administer the Capital Access Program and will target its outreach specifically to rural communities throughout the state. The Iowa Foundation for Microenterprise and Community Vitality (IFMCV) will administer the Iowa Small Business Loan program and will use the funding to provide participation loans in conjunction with private financing to support small businesses.  The Demonstration Fund, managed by IDED, encourages commercialization activities by small and medium-sized Iowa companies in the areas of product refinement, market planning and market entry activities to foster competitive companies that create jobs in Iowa.

Louisiana – $13.2 million

Treasury will allocate a total of $13,168,350 to Louisiana under the SSBCI.  Louisiana’s Department of Economic Development will use these funds to support two existing programs: the Louisiana Small Business Loan Guarantee Program and the Louisiana Seed Capital Program, a venture capital program. 

Mississippi -- $13.2 million

Treasury will allocate a total of $13,168,350 to Mississippi under the SSBCI.  The Mississippi Development Authority will use these SSBCI funds to establish the Mississippi Small Business Loan Guarantee Program, a new loan guarantee program for the state. 

Ohio -- $55.1 million

Treasury will allocate a total of $55,138,373 to Ohio under the SSBCI.  Ohio’s Department of Development will use these funds to support an existing Capital Access Program; to launch the Small Business Collateral Enhancement Program, a new cash collateral program; and to launch the Targeted Investment Program, a new venture capital program.

Oregon -- $16.5 million

Treasury will allocate a total of $16,516,197 to Oregon under the SSBCI program. The Oregon Business Development Department will use these SSBCI funds to support the Oregon Capital Access Program, a Credit Enhancement Fund, a loan guarantee program, and the existing Oregon Business Development Fund, a loan participation program.

Tennessee -- $29.7 million

Treasury will allocate a total of $29,672,070 to Tennessee under the SSBCI.  Tennessee’s Department of Economic and Community Development will use these funds to establish a new venture capital program called the “INCITE Fund.” 

 

Texas -- $46.6 million

Treasury has allocated a total of $46,553,879 to Texas under the SSBCI. The Texas Department of Agriculture will use these funds to launch two new programs: the Texas Small Business Venture Capital program and the Texas Loan Guarantee program.

Virginia -- $18.0 million

Treasury has allocated $17,953,191 to Virginia under the SSBCI.  The Virginia Small Business Financing Authority will use these funds to enhance the existing Virginia Capital Access Program; and the existing Economic Development Loan Fund, a loan participation program that provides subordinated gap financing to qualified small businesses.

Washington, D.C. -- $13.2 million

Treasury will allocate a total of $13,168,350 to Washington, D.C. under the SSBCI.  Washington, D.C. intends to use this allocation to support a new Capital Access Program.​

August 2011 U. S. Economic and Housing Market Outlook

MCLEAN, Va., Aug. 16, 2011 /PRNewswire/ -- Freddie Mac (OTC: FMCC) released today its U.S. Economic and Housing Market Outlook for August showing that despite the recent ups and downs in the capital markets the likelihood of an extended period of both relatively low short- and long-term interest rates is helpful news for the housing market's recovery as it continues to struggle.

Outlook Highlights

·         Employment was up 117,000, the best showing since April, and the unemployment rate edged down a tenth to 9.1 percent.

·         Over the first half of 2011, growth was figured to be about 0.8 percent at an annual rate, far too weak to generate enough jobs to keep pace with labor force growth.

·         Compared with the first quarter of 2008, borrowers are paying about $130 billion less in mortgage interest today, at an annual rate.

·         The likelihood of an extended period of both relatively low short- and long-term interest rates is helpful news for the housing market's recovery.

·         Interest rates on 15-year fixed-rate loans – always popular for borrowers considering to refinance – reached about 3.5 percent in early August, assuring the refinance boom continues.

·         Freddie Mac House Price Index(SM) for the U.S. shows that prices are down 25 percent, on average, as of June 2011 compared with their peak obtained five years ago.

Go to freddiemac.com/news/finance/docs/Aug_2011_public_outlook.pdf to view the complete August 2011 U.S. Economic and Housing Market Outlook. Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators.

Quotes

Attributed to Frank Nothaft, Freddie Mac, vice president and chief economist.

·         "While the capital markets have experienced sizeable movements up and down in recent weeks, these swings are unlikely to lead to whiplash or hospitalization for individual investors. Heightened uncertainty, unfortunately, can be harmful to the overall economy."

Get the latest information from Freddie Mac's Office of the Chief Economist on Twitter: @FreddieMac

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

SOURCE: Freddie Mac

For further information: Chad Wandler, +1-703-903-2446, Chad_Wandler@FreddieMac.com

The financial and other information contained in the documents that may be accessed on this page speaks only as of the date of those documents. The information could be out of date and no longer accurate. Freddie Mac does not undertake an obligation, and disclaims any duty, to update any of the information in those documents. Freddie Mac's future performance, including financial performance, is subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the company's future results are discussed more fully in our reports filed with the SEC.

Fannie Mae's Quarterly National Housing Survey Finds Job Loss a Concern for 26 Percent of American Workers

Most Single-Family Renters Will Continue to Rent Rather than Buy Their Next Home

Thirty-one Percent of Minority Mortgage Borrowers Report Being Underwater

WASHINGTON, DC — Fannie Mae's (FNMA/OTC) latest quarterly National Housing Survey (NHS) finds consumer pessimism growing with concerns about job loss, as 64 percent of Americans surveyed during the second quarter saying the economy is on the wrong track, the most for any quarter since the inception of the survey in the first quarter of 2010. That pessimism continued to mount in July, with Fannie Mae's monthly survey finding that 70 percent now believe the economy is on the wrong track, and just 23 percent say the economy is heading in the right direction.

"Consumers are more cautious due to concerns over employment and household finances," said Doug Duncan, vice president and chief economist of Fannie Mae. "As a result, consumer spending, which accounts for about 70 percent of the economy, ground to a halt in the second quarter. Consumers are more hesitant to take on additional financial commitments, and a setback to confidence means a setback to the recovery of the housing market."

Survey Highlights

Job Security

·         Twenty-six percent of American workers report being concerned about losing their job in the next twelve months. While 44 percent of concerned American workers report having a home mortgage (compared to 42 percent of all Americans), just 33 percent of them perceive their savings to be sufficient (versus 49 percent of those workers not concerned about losing their job).

·         Forty-four percent of these workers say their household expenses have increased significantly over the past year, compared to 35 percent of workers not concerned about losing their job.

·         Employed Americans concerned about job loss are more likely than all employed Americans to say it is a bad time to buy a home and they are more likely to say they would rent their next home.

Single-Family Renters

·         More than fifty percent of renters report living in single-family homes.

·         Despite just 23 percent of single-family renters saying that renting makes more sense than buying a home, 53 percent say they would continue renting if they were going to move.

·         Seventy-three percent of single-family renters say it would be difficult for them to get a home mortgage, with 33 percent citing their credit history as the biggest obstacle to getting a home mortgage (versus 20 percent of multifamily renters).

·         Compared to multifamily renters, single-family renters are younger and more likely to have children.

Minority Mortgage Borrowers

·         Thirty-one percent of minority mortgage borrowers report being underwater compared to 23 percent of non-minority mortgage borrowers.

·         Thirty-five percent of minority borrowers say they are making a great deal of financial sacrifice to own, compared to 20 percent of non-minority borrowers.

·         Minority borrowers are more likely than non-minority mortgage holders to live in states with above-average levels of negative equity and are more likely to report lower family household incomes (44 percent say their family income in 2010 did not exceed $50,000, compared to 23 percent of non-minority borrowers).

The Fannie Mae Second-Quarter 2011 National Housing Survey polled homeowners and renters to assess their attitudes toward owning and renting a home, confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system, and overall confidence in the economy.

Duncan states, "Survey data make clear the relationship between home purchase demand and concerns about the stability of employment. Dissatisfaction about the direction of the economy and related employment fears are damping demand to buy homes and slowing the recovery. People who believe owning is a better deal than renting are nonetheless planning to rent, at least until things improve it would seem."

Other Survey Highlights

·         Consistent with previous findings, most Americans think it would be difficult for them to get a home mortgage today (53 percent) and increases to 71 percent among renters.

·         While 51 percent of Generation X Americans (age 35-44) say it would be difficult for them to get a home mortgage today, the number increases to 59 percent among Generation Y (age 18-34).

·         Thirty-five percent of Pre-Baby Boomers (age 65 and older) say they know someone in their area or neighborhood who has defaulted versus 42 percent for Generation Y and 49 percent for Generation X Americans.

·         Twenty-six percent of mortgage borrowers say they are underwater, compared with 23 percent in Q1.

·         Underwater borrowers remain more likely to be stressed about their debt than all mortgage borrowers—42 percent of underwater borrowers say they are stressed about their debt, compared to 31 percent of all mortgage borrowers.

·         Underwater borrowers are more likely to know someone who has defaulted on their mortgage—57 percent of underwater borrowers versus 49 percent of all mortgage borrowers and 43 percent of the general population.

·         As in previous quarters, 2 out of 3 respondents support mortgage modifications, believing such programs help protect the economy and local communities from increased foreclosures and falling home prices.

·         In line with previous quarters, 57 percent of Generation Y Americans (age 18-34) expect their personal situation to improve over the next year, compared to only 42 percent among Generation X (age 35-44) and 35 percent among Baby Boomers (age 45-64).

Survey Methodology

From April 4, 2011 to June 28, 2011, 3,002 telephone interviews were conducted with Americans aged 18 and older to assess their confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system, and overall confidence in the economy.

This included a random sample of 3,002 members of the General Population, including 750 Outright Homeowners, 1,261 Mortgage Borrowers, and 841 Renters. Out of the 1,261 Mortgage Borrowers, 324 identified themselves as Underwater Borrowers (those who report owing at least 5 percent more on their mortgage than their home is worth). The overall margin of error for the general population sample is +/- 1.79 percent and larger for sub-groups.

Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.