Fannie Mae-No Politics (FNMA)

[navycmdr]

Opinion: Free Fannie — and Freddie, too - Ed DeMarco

July 16, 2021 3:54 p.m. EDT

Ed DeMarco, Washington - The writer is president
of the Housing Policy Council and was acting director
of the Federal Housing Finance Agency from 2009 to 2014.

The July 12 editorial “The forever war over Fannie and Freddie” was spot on in recognizing that, with Fannie Mae and Freddie Mac still in conservatorship, excessive taxpayer risk remains in this government-backed duopoly. Ironically, as the president promotes competition in the marketplace, this duopoly stifles competition in the secondary mortgage market.

Ending the conservatorships while solving the problems that led to them requires legislative housing finance reform. Such reform would not only address market structure and taxpayer protection, but would also be a critical opening to address expanding homeownership opportunity.

The Federal Housing Finance Agency has an important role in facilitating such reform, and the new acting director, Sandra Thompson, has the skills and background to make the FHFA an effective partner in the reform effort. But legislating a reformulation of the public-private balance in the mortgage sector also requires a cooperative effort among lawmakers and the Biden administration.


Though the infrastructure bill is not yet at the finish line, it will take that sort of effort to end the Fannie-Freddie conservatorships, promote greater market competition and homeownership, and redefine the government’s role in supporting the housing finance system. As the editorial pointed out, waiting 13 years is enough.

Ed DeMarco, Washington

The writer is president of the Housing Policy Council and was acting director of the Federal Housing Finance Agency from 2009 to 2014.