This is the year Fannie Mae andFreddie Macbegin building the market structure which credit unions and banksmay eventually have to use to sell their mortgage loans, accordingto EdwardDeMarco Acting Director of the Federal Housing Finance Agency,the effective manager of the two government owned institutions.

DeMarco described some of the market structure in March 4remarks before the National Association for Business Economics inWashington DC.

“We believe that setting up a new structure that is separatefrom the two companies is important for building a new secondarymortgage market infrastructure, DeMarco outlined in his preparedremarks. “Our objective, as we stated last year, is for theplatform to be able to function like a market utility, as opposedto rebuilding the proprietary infrastructures of Fannie Mae andFreddie Mac. To make this clear, I expect that the new venture willbe headed by a CEO and Chairman of the Board that are independentfrom Fannie Mae and Freddie Mac. It will also be physically locatedseparate from Fannie Mae and Freddie Mac. Importantly, we plan oninstituting a formal structure to allow for input from industryparticipants.”

DeMarco told the economists that Fannie Mae and Freddie Macwould fund the new enterprise and said that some of its work wouldreplace some of their own securitization infrastructure. But hereiterated that the focus would be on remain on the future.

“[T]he overarching goal is to create something of value thatcould either be sold or used by policy makers as a foundationalelement of the mortgage market of the future. We are designing thisto be flexible so that the long-term ownership structure can beadjusted to meet the goals and direction that policymakers may setforth for housing finance reform.”