Fannie, Freddie, Laying Groundwork for Better Future Housing

Fannie, Freddie, Laying Groundwork for Better Future Housing Finance
ORLANDO, FL -- (Marketwire) -- 11/09/12 --  Government-sponsored
enterprises Fannie Mae and Freddie Mac continue to play a crucial
role in the secondary mortgage market and remain focused on
supporting the ongoing housing market recovery while laying the
groundwork for a better future housing finance system. 
Realtors(R) and attendees at the Regulatory Issues Forum - Housing
Finance Today and Tomorrow session today during the 2012 Realtors(R)
Conference and Expo gained insights into today's secondary mortgage
market and the future of housing finance in the U.S.  
"Fannie Mae has been a leading source of liquidity since the start of
the economic crisis and we are working hard to support the ongoing
housing market recovery," said Timothy J. Mayopoulos, president and
chief executive officer of Fannie Mae. He said Fannie's priorities
are to fund the mortgage market, help troubled borrowers, and build a
strong book of business to return taxpayers' investment in the
Mayopoulos said Fannie is now managed in the overall interest of
taxpayers and no longer for the benefit of private shareholders. He
said its financial condition has improved significantly; they
currently have a strong book of business and have already paid $28
billion in dividends to the Treasury Department.  
Mayopoulos said Fannie remains dedicated to ensuring qualified
homebuyers have access to affordable mortgage capital and helping
troubled borrowers stay in their homes through loan modifications and
refinancings and avoid foreclosure; this supports neighborhoods, the
housing market and home prices. He said the organization seeks to
have servicers intervene earlier and to offer borrowers alternatives
to foreclosure that require less documentation and easier
implementation. Efforts have also been made to streamline short sale
transactions and speed response and approval timelines.  
While Fannie and Freddie played a key role during the housing
downturn and continue to provide critical market liquidity,
Mayopoulos said the extent of the GSEs' participation in housing
finance must decrease if the market is to function properly.  
"We've taken steps to attract more private capital to the market, but
private capital is op
portunistic and leans in when things are good
and out when things are bad," said Mayopoulos. "There remains little
evidence of substantial private capital ready to meet market need,
and we continue to be concerned about market capacity."  
He said lenders are reluctant to extend credit because of repurchase
risks, regulatory concerns and lack of underwriting capacity. The
industry must address these issues and Fannie will continue to try to
do their part. 
Wanda DeLeo, deputy director at the Federal Housing Finance Agency,
which has held Fannie and Freddie in conservatorship since 2008,
agreed that the GSEs must reduce their footprint in the mortgage
market. She said that since being placed into conservatorship, the
GSEs have twice raised guarantee fees, which they believe is helping
reduce taxpayers' risk from the financial support they provide the
GSEs and will move their pricing closer to what it would be if
mortgage credit risk was borne solely by private capital. DeLeo said
this could also incentivize private capital to increase participation
in the mortgage market.  
"In the four years since FHFA established conservatorship of Fannie
and Freddie, we have made significant strides toward maintaining a
housing market recovery, keeping individuals in their homes, and
correcting the issues that led to the enterprises being placed into
conservatorship," said DeLeo.  
FHFA recently released a whitepaper outlining a series of strategies
and initiatives that it hopes will improve mortgage processes,
encourage greater private market participation, and lay the
foundation for a post-conservatorship housing finance market.  
DeLeo said the whitepaper sets forth three strategic goals for
transitioning to a secondary mortgage market of the future. The first
is to build a new infrastructure and common securitization platform
for the secondary mortgage market that could be used by multiple
issuers and supports the participation of private capital. The plan
also gradually shrinks the GSEs' operations and presence in the
marketplace, and lastly maintains foreclosure prevention activities
and credit availability for both new and refinanced mortgages.  
FHFA is seeking input on the proposal from the industry and public
until December 3.  
The National Association of Realtors(R), "The Voice for Real Estate,"
is America's largest trade association, representing 1 million
members involved in all aspects of the residential and commercial
real estate industries. 
Information about NAR is available at This and other
news releases are posted in the "News, Blogs and Videos" tab on the
For further information contact:
Sara Wiskerchen
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