ICBA Vs. MBA Housing Reform Options For Fannie And Freddie
Apr.26.17 | Mark Gottlieb
..... Summary .....
-- The ICBA just released an excellent whitepaper that lays out the principles for housing-finance reform that is a must for FNMA and Freddie Mac investors to read.
-- I looked at this as well as a competing plan from the MBA. The ICBA plan is currently the front runner, the ICBA has met with Trump and Mnuchin.
-- In fact, Commerce Secretary Mnuchin will speak at the ICBA Capital Summit on May 3.
The ICBA just released an excellent whitepaper that lays out the principles for housing-finance reform that is a must for FNMA (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) investors to read. This plan is currently the front runner, the ICBA has met with President Trump and Treasury Secretary Mnuchin, the Mortgage Bankers Association has an alternative plan that is complex and has not met with them.
In its whitepaper, ICBA lays out its principles for GSE reform, including:
allowing Fannie and Freddie, which have paid out nearly $80 billion more to the U.S. Treasury than they received during the financial crisis, to rebuild their capital buffers,
providing competitive, equal and direct access to the market on a single-loan basis and the continued ability to retain and service those loans locally,
reducing the risks posed to the GSEs by credit-risk transfers, and
ensuring an explicit, paid-for government guarantee of GSE mortgage-backed securities and strong oversight from a single regulator.
ICBA's whitepaper also outlines a way to move forward with needed administrative and legislative reforms, such as:
the Federal Housing Finance Agency ending the GSEs' net-worth sweep, establishing capital-restoration plans, and delaying the launch of its Uniform Mortgage Backed Security until the GSEs are recapitalized and released from conservatorship, and
Congress creating a catastrophic mortgage insurance fund for GSE securities and changing the GSEs to regulated and shareholder-owned financial utilities.
Treasury Secretary Steven Mnuchin and Rep. Jeb Hensarling will speak at the Media Advisory: ICBA Capital Summit May 1 - 3. All ears will be on Mnuchin when he speaks from 8-8:30 AM on May 3.
