FHFA Issues Its Plans for the GSEs to Congress
Federal Housing Finance Agency (FHFA) Acting Director Edward J. DeMarco has issued a strategic plan for the next phase of the conservatorships of the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, to Congress. The plan builds on DeMarco’s February 2010 letter to Congress on the conservatorships and sets forth objectives and steps that the FHFA is taking or will take to meet its obligations as conservator. Fannie Mae and Freddie Mac were placed into conservatorship on Sept. 6, 2008 and have since received more than $180 billion in taxpayer support. "MBA welcomes FHFA's proposal for the next phase of the conservatorship of Fannie Mae and Freddie Mac," said David H. Stevens, president and chief executive officer of the Mortgage Bankers Association (MBA). "We have been out front on GSE reform issues, and our Council on Ensuring Mortgage Liquidity outlined many of these same types of changes in its September 2009 proposal on the future of the government's role in the secondary mortgage market." The FHFA identifies three strategic goals for the next phase of the conservatorships: ►Build. Build a new infrastructure for the secondary mortgage market; ►Contract. Gradually contract the GSEs’ dominant presence in the marketplace while simplifying and shrinking their operations; and ►Maintain. Maintain foreclosure prevention activities and credit availability for new and refinanced mortgages. “With the conservatorships operating for more than three years and no near-term resolution in sight, it is time to update and extend the goals and directions of the conservatorships,” said DeMarco. “FHFA is contemplating next steps to build an infrastructure for the secondary mortgage market that is consistent with existing policy proposals and will support any outcome of the leading legislative proposals. FHFA looks forward to working with Congress and the Administration on a resolution of the conservatorships and a comprehensive review of the nation’s housing finance system." Stevens continued, "Uncertainty, wherever it exists, must be removed and a clear path forward must be laid out, in order for the housing market in this country to be strong and vibrant. This proposal that FHFA is putting forth shows a strong commitment to doing just that."