Fannie Mae, Freddie Mac Slated to Downsize
The Federal Housing Finance Agency, the federal regulator and conservator of government-sponsored mortgage giants Fannie Mae and Freddie Mac, has delivered a strategic plan for the two that envisions them becoming smaller and less relevant to the secondary mortgage market.
“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 director Edward DeMarco in a Feb. 21 letter accompanying the plan. “FHFA is contemplating the 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,” DeMarco added.
But while the plan left the largest questions for federal lawmakers to answer, the agency clearly sought to do what it could with the less politically sensitive issues of how a secondary mortgage market might function.
A key element of the agency's plan for a future secondary mortgage market includes a platform that would bundle mortgages into securities and provide operational support to process and track the payments from borrowers to investors, the agency wrote in the plan.