Are coming out; here are two.  The existence of these objections demonstrates the disaster that government involvement in the market, together with the resulting dependence on government, generate.

Kelly Powers, Vice President for Advocacy at the Arizona Mortgage Lenders Association:

[She insists that] there isn’t enough private capital to step in and take over, and the results on lending could be damaging.

“It would make it much more difficult for people to borrow.  There would be less liquidity and less players in the game.  The requirements would go up and people won’t be able to qualify for loans.”

She added that she “doesn’t want to operate without a government safety net.”

Of course there isn’t enough private capital today: Uncle Sugar has been providing taxpayer money, either directly, or indirectly through “guaranties.”  Liquidity will develop as the market develops and wants it, based on actual demand and supply, not on the availability of the public trough funded by private tax money—which is our money, not government’s and not yours.

With regard to loan “requirements” and “borrowing difficulty,” once the liquidity aspect is sorted out through the transition period (both President Barack Obama and a bipartisan bill in progress—that also excludes future government participation—posit five-six years for getting rid of Fannie and Freddie) lending and borrowing…difficulty…will more closely be based on actual credit worthiness.  See a nearby post.

In the end, a business whose leadership is unable to function without its collective hand in the taxpayer’s pocket isn’t ready for prime time.  No, if you’re unable to take a risk and suffer the consequences without assurance of government bailout, then you’re a failure as a businessman already.

Independent Bankers of America President and CEO Cam Fine also wants his association’s hands in our pockets, and he added a different objection.

It is extremely complex and it would be a delicate venture to get all of the moving parts in place.  It would take a great deal of coordination and cooperation among private investors, mortgage producers, properly funded and established and all of that would have to be done simultaneously.

Again, this is malarkey.  If it’s hard to do, that just emphasizes the importance of getting started.  More importantly, over the posited transition period, a free market will evolve the needed “moving parts” just fine.  If a business(man) is unable to develop in an evolving market place, if a business(man) is unable to take the first step on a business path without the last step—which never arrives in a human endeavor; the last step is itself constantly changing—being planned out to a gnat’s patootie, if a business(man) is unable to function except in a centrally planned economy, there’s no place for that business(man) here.

…mostly.

In a speech Tuesday in Phoenix, Obama call[ed] for transitioning the business model of Fannie and Freddie into a system where “private capital must be wiped out before the government pays on any form of catastrophic guarantee,” a senior administration official said.

If he really wants to, this is mostly good.  Those taking the risks should be the ones to reap the rewards—and the only ones to suffer the loss.  Taxpayers should not be dragged into a failure at all.

And that’s the “mostly” part: “before the government pays on any form of catastrophic guarantee” should not be a player at all.  This is what private insurance in a free market is for.

Obama will also renew his calls for sweeping mortgage refinancing legislation when he travels to Phoenix Tuesday.

Here, not so much.  The only sweeping legislation necessary is the repeal of the Community Reinvestment Act, a high-minded sounding idea that in the realization has been used only to browbeat lenders into making bad loans to poor credit risks.

…a call for expanding refinancing eligibility for homeowners who do not have government-backed mortgages.

In particular, there’s no need for a government determination of “refinancing eligibility.”  The market will determine that, just fine.  Government distortions from the market do no good at all; they only destroy the pricing information extant.