Federal Housing Finance Agency (FHFA) Acting Director Edward J. DeMarco has released the 2013 Conservatorship Scorecard for Fannie Mae and Freddie Mac. The 2013 Scorecard details specific priorities for Fannie Mae and Freddie Mac in 2013 that builds upon the three strategic goals announced in FHFA’s Strategic Plan for Enterprise Conservatorships released in 2012.
►Build: Build a new securitization infrastructure, including a common securitization platform;
►Contract: Contract Fannie Mae and Freddie Mac’s dominant presence in the marketplace while simplifying and shrinking certain operations;
►Maintain: Maintain foreclosure prevention activities and credit availability for new and refinanced mortgages.
"Despite some signs of normalization in the housing market, our nation finds itself in the uncomfortable position of having over 90 percent of new mortgage originations supported by the federal government," said DeMarco. "That support is provided directly through government loan programs like the Federal Housing Administration (FHA), and through the financial support that the Treasury Department provides to maintain the solvency of Fannie Mae and Freddie Mac."
The FHFA's plans to build a new joint company for securitizing home loans is a stepping stone toward decreased government involvement in the mortgage marketplace.
“In the four years since the GSEs were placed into conservatorship, MBA, the Bipartisan Policy Center, policymakers and countless others have all put forth proposals and ideas on how to restructure the secondary mortgage market. It’s now time for action," said David H. Stevens, President & CEO of the Mortgage Bankers Association (MBA). "The administration, Congress and regulators need to engage with other stakeholders to move the ball forward. Until this happens, the uncertainty in the markets will persist, and a full recovery of the housing market will remain elusive.”
By creating a new securitization company, FHFA is forcing Fannie Mae and Freddie Mac to abandon their current separate systems and construct a single infrastructure to support the mortgage marketplace. The new entity will be structured as a joint venture owned by Fannie Mae and Freddie Mac.