Fannie Mae-No Politics (FNMA)

[Rodney5]

What does 15 years of conservatorship do according to the Fed?

DELAY: "raises the risk that the conservatorships are ended by returning Fannie Mae and Freddie Mac to private status with only minor changes to their charters"

Federal Reserve Bank of New York
Staff Reports

Quote: "The path forward for reform of Fannie Mae and Freddie Mac does not look promising. As time passes since September 2008, the perceived urgency for reform seems to recede. Delay prolongs the uncertainty over the government’s future role in residential mortgage finance, which in turn is a deterrent to private capital re-entering the market, and makes the government’s role appear more difficult to replace. Delay also raises the likelihood that deeper reform will be judged as too difficult to accomplish, and raises the risk that the conservatorships are ended by returning Fannie Mae and Freddie Mac to private status with only minor changes to their charters. That is, the key recommendation of the U.S. Treasury and U.S. Department of Housing and Urban Development (2011) white paper – that Fannie Mae and Freddie Mac should be wound down – would in fact not come to pass. This would be a colossal missed opportunity to put U.S. residential mortgage finance on a more stable long-term footing." End of Quote

Page 30 Link: https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr719.pdf