Friday, December 08, 2017 3:48:50 PM
Friday Dec 8,2017 ... By Paul Muolo ... pmuolo@imfpubs.com
It appears that Congressional reform of the housing-finance system – and final resolution of Fannie Mae and Freddie Mac – is back on track with a key piece of good news for MBS investors: an explicit federal guarantee on conventional product looks likely.
But now comes the hard part: the details and working out a compromise among elected officials and the industries that will be affected by a new world order for mortgage finance.
Late this week, a key piece to the reform puzzle fell into place when House Financial Services Committee Chairman Jeb Hensarling, R-TX, said publicly he’s ready to cut a deal on reform and is now open to the idea of a broader role for Ginnie Mae, possibly as a successor of sorts for Fannie and Freddie.
For years, as chairman of the HFSC, Hensarling has been a fierce opponent of any type of government guarantee on MBS backed by conventional mortgages, maintaining that the private sector should bear the burden of all risk – and that the two government-sponsored enterprises should be liquidated and their charters retired.
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