Replies to post #713046 on Fannie Mae-No Politics (FNMA)

[FOFreddie]

Here is what Mike Calhoun thinks of the situation. Transcript from last week's Brookings Event - Feb 23, 2022 :

MR. CALHOUN: By locking in a lot of the extraordinary authorities that the
conservator has in –– the director of FHFA has in conservatorship that FHFA has. And just
as an example, the fact that the GSEs step in with the deferral mods that Director Calabria
ordered, the estimates were the cost of that and the advancing –– covering advances from services was north of $15 billion. You have to build those kinds of resiliency and market
support, as well as individual borrower support into the system. And this does this. And the
hook, if you will, is right now Treasury in essence holds all the cards there. They've got the
GSEs in a debt trap that the payday lenders, as one judge said might admire, in that they
can never pay off the debt. The GSEs need a backing most believe, and I do, from the
Treasury to satisfy secondary market participants who want that backing.
And so those hooks provide extraordinary tools to set a new –– within
HERRA –– still provide the tools to set the regime –– much of what we have now and even
build further on it. There are some challenges we'll talk about here about how to not only put
that in place, but to make it durable where it's in place so it couldn't be easily reversed if, for
example, there's a change in administration in the future, which there will be at some point.