New Report Envisions Post-Conservatorship Housing Policy Landscape – NMP Skip to main content

New Report Envisions Post-Conservatorship Housing Policy Landscape

Phil Hall
Jun 26, 2019
Photo credit: Getty Images/jandrielombard

The still-percolating question of ending the federal conservatorship of the government-sponsored enterprises (GSEs) is the subject of a new joint study released by Barclays in partnership with Annaly Capital Management Inc.
In the newly-published “GSE Reform: Unfinished Business,” the conclusion is presented that there is bipartisan agreement on framing the post-conservatorship era in a manner that protects taxpayers while attracting private capital–and the report adds that the White House can take unilateral steps to achieve those goals. However, the need to create a more competitive post-conservatorship landscape requires Congress’ input, which is where things get a bit thorny.
The report also envisions a revolving credit risk transfer structure to enable the GSEs to jettison credit risk on most of their future production, thereby avoiding execution risk while protecting the taxpayer. To attract private capital, the reports recommend that the GSEs reduce their footprint in areas that are not part of their core mandate, such as second homes, investor and jumbo mortgages. As for foster competition and erasing the too big to fail risk, the report encourages Congress to pass legislation that replaces the GSE duopoly with multiple smaller guarantors.
“GSE reform is difficult to pull off successfully,” said Ajay Rajadhyaksha, head of macro research at Barclays and a co-author of the report. “Do it right and you reduce the U.S. homebuyer’s dependence on the GSE duopoly, manage to get private capital back in, and protect the U.S. taxpayer against a repeat of 2008. Do it wrong, and you risk up-ending the world’s largest housing market. This study examines a possible way forward.”

Jun 26, 2019
Lakeview Loan Servicing Faces Multiple Lawsuits Over Data Breach

At least a dozen civil lawsuits have been filed against the company, all seeking class-action status.

Industry News
May 26, 2022
Homepoint Rolls Out Jumbo ARM Loans

Homepoint's Jumbo ARM is a strategic addition to the company’s expanding jumbo portfolio.

Industry News
May 25, 2022
Planet Home Lending Expands in Oregon

New team in Portland focuses on construction lending in the Northwest.

May 24, 2022
PennyMac Cutting 207 Jobs

A wide variety of positions are affected.

Industry News
May 24, 2022
Loan Officer Charged With Bank Fraud, Identity Theft

If convicted, she faces up to 30 years in federal prison on each bank fraud count and a mandatory consecutive 2 years’ imprisonment.

Industry News
May 24, 2022
Openn Launches Pilot with bridgeMLS For Sales In California

Agents in Northern California, Bay Area will be able to list property and accept offers using the platform. 

May 24, 2022