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Replies to post #218189 on Fannie Mae-No Politics (FNMA)
Watt explained that the reversal of Agency plans for GSE wind-down “is motivated by concerns about how such a reduction could adversely impact the health of the current housing finance market.”
‘We won’: Bove
Bove’s response to the Watt speech (titled: ‘Wow!!! Unbelievable; We Won’) draws a line from recent comments by Federal Reserve chairperson Janet Yellen, Treasury Secretary Jack Lew, and former FHFA director Edward DeMarco centered on how the weakness in the housing market threatens the rest of the economy to Watt’s speech and sees an administration that has come around to his point of view.
“For some time, I have argued that the United States cannot shut down Fannie Mae and Freddie Mac,” writes Bove. “It now appears that the Administration along with the Federal Reserve sees and understands what they have done. More importantly, it now appears that the policies of disaster are being ripped up and there will be a return to the housing philosophies of the past.”
The combination of tapering (reducing demand for mortgage-backed securities), the Treasury mandated reduction in Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) portfolios, and the combination of new Consumer Financial Protection Bureau regulations and the Qualified Mortgage Rules (QMR) had created what Bove calls a perfect storm for the housing market.
