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Friday, June 11, 2021 3:44:21 PM
Former Trump Ax on GSEs Weighs In: Reform is Done, It’s All About Capital
Fri June 11, 2021 - dhollier@imfpubs.com
The most important change necessary for Fannie Mae and Freddie Mac to exit conservatorship
boils down to just one thing: capital, according to Craig Phillips, the former Treasury official
responsible for housing-finance policy in the Trump administration.
“We have a bifurcated system with an insured product that’s guaranteed by Ginnie Mae and
Fannie and Freddie address the conventional part of the market very effectively. So, I guess
I’m kind of for the system the way it is,” Phillips said in an interview this week with Inside MBS & ABS.
“There are two providers — that creates competition. I wouldn’t be for just one
government-sponsored enterprise because I think competition is healthy.
They should be privately owned. A government guarantee should back the securities,
and they should pay for that guarantee.”
All that remains, he argued, is for the GSEs to have enough capital to ensure they never fail again.
That, of course, is somewhat at odds with the views of Mark Calabria, the director of the
Federal Housing Finance Agency, who believes the GSEs need additional reform before
they can be safely released from conservatorship
Fri June 11, 2021 - dhollier@imfpubs.com
The most important change necessary for Fannie Mae and Freddie Mac to exit conservatorship
boils down to just one thing: capital, according to Craig Phillips, the former Treasury official
responsible for housing-finance policy in the Trump administration.
“We have a bifurcated system with an insured product that’s guaranteed by Ginnie Mae and
Fannie and Freddie address the conventional part of the market very effectively. So, I guess
I’m kind of for the system the way it is,” Phillips said in an interview this week with Inside MBS & ABS.
“There are two providers — that creates competition. I wouldn’t be for just one
government-sponsored enterprise because I think competition is healthy.
They should be privately owned. A government guarantee should back the securities,
and they should pay for that guarantee.”
All that remains, he argued, is for the GSEs to have enough capital to ensure they never fail again.
That, of course, is somewhat at odds with the views of Mark Calabria, the director of the
Federal Housing Finance Agency, who believes the GSEs need additional reform before
they can be safely released from conservatorship
