After nearly 10 years under conservatorship, reforming Fannie Mae and Freddie Mac is finally high up on the President’s priority list. However, there is still no official plan around what exactly this reform will look like.
One of the most prominent options comes from the desk of House Financial Services Committee Chairman Rep. Jeb Hensarling, R-Texas, who was actually standing next to President Donald Trump when he signed the executive order to begin rolling back the Dodd-Frank Wall Street Reform Act.
In an interview with CNBC on Friday (video below), David Stevens, Mortgage Bankers Association CEO, discussed what he sees ahead for government-sponsored enterprise reform.
“The GSEs are the last sort of unfinished piece of business of size from the Obama administration,” Stevens said. “They were put into conservatorship in the previous administration before Obama, and then for eight years, we talked about it. In the meantime, they sit in conservatorship on the government’s balance sheet, with a lot of taxpayer exposure.”
Stevens stressed that “we need to be collectively concerned about the housing finance system,” even pointing to his own association’s recent proposal for GSE reform.
The MBA, which is the largest trade group in the mortgage finance space, published back in January its first product from its recently formed “task force,” which is made up of some of the top lenders and insurers in the industry.
The paper gave a first look at the MBA’s plans for ending the conservatorship of Fannie Mae and Freddie Mac, the government-sponsored enterprises, with the full paper anticipated to come in April.
And it looks like U.S. Treasury Secretary Steven Mnuchin is headed in the right direction, according to Stevens.
“Secretary Mnuchin is hitting the rallying cry that any housing stakeholder should support because you need to get them off balance sheet,” said Stevens. “You need to reform them, but we need to protect some of the core functions that they provide.”
Mnuchin’s full first interview as Treasury Secretary can be found here.
