As lawmakers continue to mull over whether or not to dismantle Fannie Mae and Freddie Mac to set up a new housing finance framework, a new survey released shows a majority of lenders are in favor of the reform.
According to the Collingwood Group’s Mortgage Outlook Report, 65% of surveyed respondents support the push for GSE (government-sponsored enterprise) reform, calling their current state of conservatorship under the Federal Housing Finance Agency (FHFA) unsustainable.
However, respondents of the survey, which was distributed to thousands of mortgage professionals, share mixed feelings about the future role of the GSEs. None of the respondents called for a wind-down or elimination of the GSEs, but rather they indicated a need for administrative changes.
The array of issues and concerns ranged from "aggressive put-back tactics" to the companies' overwhelmingly dominant position in the market, which some firms see as the government crowding out the private sector.
Those who want reform said the GSEs need not serve as a “backup guarantor of home mortgages” and believe that the government “shouldn’t be guaranteeing more than 90% of the market.”
Many respondents acknowledge a role for the government in the mortgage market and appear to prefer that the GSEs remain in place. One respondent wrote, “In six years no one has come up with a viable better option.” Another expressed that, “Ultimate ownership of GSEs needs to be solved for market certainty. Uncertainty always constrains economic improvements.”
During a Senate Banking Committee in November, lawmakers grilled FHFA Director Mel Watt and pushed for a move toward dismantling Fannie Mae and Freddie Mac to set up a new housing finance framework.
Banking Committee Chairman Tim Johnson (D-S.D.) urged Watt to “engage with the Treasury Department in talks to end the conservatorship” of the mortgage giants if Congress doesn’t proceed with housing-finance reform.
Click here to view the full mortgage outlook report.