Fannie Mae and Freddie Mac

Fannie Mae and Freddie Mac

The GSE Conservatorships Are Not Sustainable Says FHFA Director

“…[I]t is especially irresponsible for the Enterprises not to have such a limited buffer because a loss in any quarter would result in an additional draw of taxpayer support... [T]his could erode investor confidence [,] …stifle liquidity in the [MBS] market and …increase the cost of mortgage credit for borrowers. FHFA has explicit statutory obligations to ensure that each Enterprise …fosters ‘liquid, efficient, competitive, and resilient national housing finance markets.’ To ensure that we meet these obligations, we cannot risk the loss of investor confidence."

 


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Posted: May 12th, 2017 | Permalink

Addressing the Housing Finance Conundrum

“Looking forward, housing finance reform requires a holistic approach,” wrote Blackrock analysts. “Most significantly, a sustainable plan needs to consider the roles and structures of Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development (which encompasses FHA and GinnieMae) as well as their regulatory regimes, keeping in mind multiple constituencies. …And, of course, the Federal government has an interest in protecting both the economy and taxpayers.”


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Posted: May 8th, 2017 | Permalink

Treasury Secretary Mnuchin Comments on the GSEs

“I haven’t said [that Fannie Mae and Freddie Mac would] be privatized,” said Treasury Secretary Steven Mnuchin. “What I have said is I’m committed to housing reform. We’re committed to not leaving them as-is for the next four years. “We want to make sure that there is ample credit for housing. It’s a very, very important part of the economy, but we also want to make sure we don’t put the taxpayers at risk. And as you know, those two companies only exist because we have a giant line from the Treasury that supports them. We’re committed to having housing reform…”


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Posted: May 3rd, 2017 | Permalink

Toward a New Secondary Mortgage Market

“Eight years,” wrote Milken Institute’s Ed DeMarco and Michael Bright. “It has been eight years since the '“temporary' conservatorships of Fannie Mae and Freddie Mac ... began. Eight years since these two enterprises’ bondholders were rescued by a nearly $200 billion taxpayer injection because of their central role in the American housing market. …But here we sit. After eight years. It is time—long past time—for us to move beyond this situation. It is time for the mortgage market to grow up, to learn from the mistakes of the past, and to begin serving the needs of the 21st century American economy…”


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Posted: May 1st, 2017 | Permalink

A Dangerous Recipe for GSE Reform

“The MBA’s [GSE reform] plan, like many other proposals, fails to address the question: ‘What is the problem we should be seeking to solve’,” wrote Graham Fisher’s Josh Rosner. “Any changes to the system should seek to create a stable, cyclically neutral or countercyclical, system for the provisioning of mortgage credit in economically adverse environments during which banks and market participants are unwilling to make or hold new mortgage loans. …The recognition of the provisioning of societally necessary goods and services is the reason that we charter electric, water, gas and other utilities."


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Posted: April 28th, 2017 | Permalink

Financial Regulatory Reform in the Trump Administration

“House Financial Services Committee Chairman Jeb Hensarling (R-TX) …views the CHOICE Act as a “blueprint” for financial regulatory reform in a Trump administration and indicated that financial regulatory reform is “going to happen in the first year” of the Trump administration.” 


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Posted: January 30th, 2017 | Permalink