Fannie Mae (FNMA)

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MBA Chief Dave Stevens: The GSE Capital Buffer is a Distraction

Thursday Dec 14,2017 ... By Paul Muolo ... [e-mail]



The debate over whether Fannie Mae and Freddie Mac should have a capital buffer is a distraction to both mortgage bankers and elected officials pondering GSE reform, said David Stevens, president and CEO of the Mortgage Bankers Association.

In an interview with Inside Mortgage Finance, Stevens said he’s never been against the idea of Fannie and Freddie holding capital, but he feels “reforming” the two mortgage giants “must be the priority” of Congress.

Stevens’ comments on the GSE capital buffer – which falls to zero on Jan. 1 – are not new, but the trade group chief is hopeful that reform legislation might finally happen in 2018.

Stevens, who is set to retire next fall, believes the window is now open to a legislative solution.

Earlier this week, the Community Home Lenders Association repeated its plea that Federal Housing Finance Agency Director Mel Watt withhold GSE dividend payments to Treasury and allow Fannie and Freddie to build capital. For the full story, see the new edition of Inside Mortgage Finance.