With legislation to replace the government-sponsored enterprises not likely to be enacted until after the 2014 election, the Mortgage Bankers Association is proposing five steps administrators can take now to ensure a smooth transition without disrupting the nations housing finance system. At a press briefing this week, MBA President and Chief Executive Officer David Stevens rolled out the trade groups five-point plan that could be immediately implemented by the Federal Housing Finance Agency and/or Fannie Mae and Freddie Mac without the need for legislation. At the top of the MBAs list and the tallest order of the five recommendations is...
The Fed chief told elected officials that whatever housing finance reform plan they choose to replace Fannie Mae and Freddie Mac, it should be clear to private investors about the governments role in the market.
Supporters are defending a House Republican proposal to liquidate Fannie Mae and Freddie Mac and let the private market fill in the gaps. But despite a nearly complete lack of bipartisan support and even doubts from within his own party, the author of the proposal is pushing hard to fast-track the bill. This week, the House Financial Services Committee heard testimony from 11 experts on the Protecting American Taxpayers and Homeowners Act, introduced last week by Rep. Jeb Hensarling, R-TX.The PATH Act is a comprehensive proposal to create a sustainable housing finance system by ending the federal governments domination of the housing finance market and give consumers more choices in determining which mortgage product best suits their needs, said Hensarling.
The Federal Housing Finance Agency and the Treasury Department illegally implemented the so-called sweep amendment last summer that altered Fannie Maes and Freddie Macs preferred stock purchase agreements to seize nearly all the two GSEs profits, in direct violation of the 2008 conservatorship legislation, according to investors lawsuits filed in federal court last week. Unlike the initial litigation filed by investors last month that challenges the entire 2008 government takeover of Fannie and Freddie, the separate suits filed by hedge-fund Perry Capital and by Fairholme Capital Management claim that Treasurys August 2012 amendment to the preferred stock purchase agreements violated the Housing and Economic Recovery Act of 2008, which placed the GSEs in conservatorship.
Fannie Mae and Freddie Mac are both widely recognized entities in the collective mind of the general public, but more than half of those surveyed hold a nearly toxic image of the two GSEs, according to a new poll released this week. Conducted by ONMessage Inc. on behalf of the American Action Forum, the poll noted that 72 percent of respondents knew of or widely recognized Fannie and Freddie. The survey consisted of 1,200 likely voters from 18 congressional districts.
As expected, the presidents nomination of Rep. Mel Watt, D-NC, to head the Federal Housing Finance Agency was approved late this week by the Senate Banking, Housing and Urban Affairs Committee. Also as expected, the committee voted 12-10 strictly along party lines to advance Watts nomination to the full Senate, where it awaits a vote on confirmation. As Congress continues to seek consensus on a long-term solution for our housing finance system, we need a Senate-confirmed director in place at the Federal Housing Finance Agency, said Committee Chairman Sen. Tim Johnson, D-SD. Congressman Mel Watt is well qualified to lead the FHFA in its conservatorship of Fannie Mae and Freddie Mac, and he too should be confirmed without delay.