The Federal Housing Finance Agency, the federal regulator and conservator of government-owned mortgage giants Fannie Mae and Freddie Mac, has delivered a strategic plan for the two that envisions them moving smaller and less relevant to the secondary mortgage market moving forward.
“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,” wrote FHFA acting directors Edward DeMarco in a Feb. 21 letter accompanying the plan. “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.”
The goals of the agency's plan includes building new infrastructure for the secondary mortgage market of the future along with taking steps to move more of the mortgage business away from the GSEs. The plan also envisions the agency continuing its efforts at foreclosure mitigation.
But the plan is also short on specifics, a fact that NAFCU picked up on in a Feb. 21 letter to FHFA about the plan.
“The FHFA strategic plan raises more questions than it answers in the ongoing debate of GSE reform,” NAFCU wrote. “Whether a government guarantee will be part of the future of any reform plan is a key issue for our members, and one FHFA has not answered. NAFCU strongly supports a viable secondary market to which credit unions have equitable access.”
“The impact of a single securitization platform, the role of pricing, and the degree of private market control in the secondary market are all areas where the fine-print determines whether the outcome will be positive or negative for our members,” the association observed. “We look forward to a continued debate on these issues and appreciate that FHFA has acknowledged the necessity to keep Fannie and Freddie viable until an appropriate transition is in place.”