Weakness in the U.S. housing market will make it impossible for the federal government to withdraw its support for the mortgage-finance system in the coming year, Freddie Mac Chief Executive Officer Charles E. Haldeman said.
“I don’t think there’s going to be any significant improvement in the housing market,” Haldeman said today at a Mortgage Bankers Association conference in Atlanta. “We will need the same kind of government involvement as we have right now. I don’t think there will be any serious disengagement.”
Freddie Mac and Fannie Mae, the government-sponsored firms that own or control half of the U.S. mortgage market, have been run under federal conservatorship since September 2008 when they were seized by regulators amid losses that pushed them to the brink of collapse. Treasury Secretary Timothy F. Geithner has promised to deliver a plan for overhauling the firms and the mortgage-finance system by the end of January.
Ginnie Mae President Theodore Tozer, whose agency securitizes mortgages insured by government lenders including the Federal Housing administration, said the U.S. may face a bigger task in rebuilding housing finance than it did in crafting the Wall Street rules overhaul enacted in July.
“This will be bigger than Dodd-Frank,” Tozer said today in an interview at the conference. There’s a possibility that a year from now the government’s share of the mortgage market will remain “disproportionately high,” he said
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