Expert Says Fannie, Freddie Here to Stay: Onsite Coverage
LAS VEGAS — Since they contributed 6% to the federal government’s income in 2013, that’s one reason why it is highly unlikely that legislation to change Fannie Mae or Freddie Mac will move before 2017.
Tim Rood, chairman of the Washington-based consultancy The Collingwood Group, shared that prediction during a session Tuesday at the American Credit Union Mortgage Association’s annual meeting, which is taking place through Wednesday at the Encore in Las Vegas.
Among the factors that are slowing down the legislative process are upcoming elections, a very crowded legislative calendar for the last few months of this year, and the vastly improved importance both Fannie and Freddie have begun to show, Rood said.
The government-sponsored enterprises are charging some of the highest fees ever on the cleanest book of business they have ever seen and offloading much of the remaining risk, he added.
“I can’t see anyone being really anxious to change that,” Rood said.
He told ACUMA conference attendees that loans backed by insurance from the Federal Housing Administration will also continue to grow in importance as the organization returns to having more than its 2% legislatively mandated capital cushion.
Money that comes in to FHA over the 2% cushion is considered negative subsidies or income in Washington, Rood explained. That contributes to the Department of Housing and Urban Development’s bottom so that Congress does not have to appropriate as much for that agency, he noted.