Oh Sandra, "...the time has come to end what was intended to be a short-term timeout for the enterprises."
"Multiple reform plans were debated by both houses of Congress, but none ever made it to a floor vote. The reason was simple—the market was working well, and no one wanted to ruin it."
"And because the FHFA director effectively runs both companies and answers to the president, the GSEs serve as a de facto arm of the administration to further its policy agenda."
"As conservator and regulator, the FHFA can also dictate credit, pricing, and operational policy, in addition to its customary safety and soundness responsibilities. The agency can direct the GSEs to create programs and initiatives that further a political agenda regardless of long-term viability or costs—an agenda that is subject to dramatic shifts as administrations change. This type of control can have unintended consequences, destabilize the mortgage market, and put taxpayers at risk.
Meanwhile, the GSEs cannot access the capital markets to raise outside equity because the Treasury and FHFA have not or will not take action to resolve the government’s ownership stake. So, the GSEs remain in a netherworld between being able to operate like any other federally chartered, shareholder-owned, privately run corporate entity (which they are) and a government agency run by political appointees, similar to the Department of Housing and Urban Development or Ginnie Mae."
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