Broeksmit: ‘Balance’ Key to GSE Reform Efforts
With the 2018 elections over–sort of, as a couple of handful of races remain to be decided–attention in Washington is swinging to what the 116th Congress and the Trump Administration will focus on, and what it could accomplish.
High on the priority list for the real estate finance industry is GSE reform, an issue that, over the past several years, the Mortgage Bankers Association has championed (https://www.mba.org/issues/gse-reform). But with a divided Congress–House Democrats will regain control of the chamber Jan. 3, while the Senate remains in Republican hands–the legislative landscape remains murky, leading most analysts to look to the Trump Administration for direction.
MBA President and CEO Robert D. Broeksmit, CMB said policymakers should take a balanced approach to GSE reform to avoid market disruptions and enable a smooth transition.
The GSEs, Broeksmit noted, have been in federal conservatorship for more than 10 years. “Secondary market reform requires a measured approach designed to benefit consumers and to promote healthy competition backed by private capital,” he said.
“The important point,” Broeksmit added, “is that private capital needs to be at the ready if and when the Administration or the Federal Housing Finance Agency starts taking steps to reduce the market’s reliance on Fannie and Freddie.”
The Wall Street Journal, in a Nov. 11 article (https://www.wsj.com/articles/mortgage-industry-braces-for-trump-administration-to-make-changes-at-fannie-freddie-1541955600), notes the White House is expected to consider steps in the coming months that could reduce the government’s footprint in backstopping the market through mortgage-finance giants Fannie Mae and Freddie Mac.
