The regulator of housing giants Fannie Mae and Freddie Mac on Tuesday outlined a new strategic plan for the two government-controlled firms, stepping into a void left by congressional inaction.
The Federal Housing Finance Agency said that among the main goals would be to steer the mortgage finance market in a direction that leaves it dominated by the private sector instead of the government.
The plan, which has taken FHFA a little more than a year to pull together, is meant as a temporary substitute until Congress and the administration put in place a lasting framework for housing finance. Fannie Mae and Freddie Mac were placed in government conservatorship in 2008 as mounting mortgages losses threatened their solvency.
"Conservatorship is not meant to go on forever," FHFA Acting Director Edward DeMarco told Reuters. "Ultimately, we are going to need congressional action to conclude the conservatorship."
FHFA expects to build a single mortgage securitization platform to replace the current systems the two government-sponsored enterprises use to support housing finance. DeMarco said this new structure would "take some time to implement."
A second goal would be to reduce Fannie Mae and Freddie Mac's dominant presence in the housing market, aiming to attract private-sector participation.
"We are gradually shrinking the footprint that Fannie and Freddie will have in the mortgage market," DeMarco said. "Lawmakers are still going to have to come to some consensus about the role of the government and government guarantees."
Under the new strategy, FHFA said it will continue to pave the way for successful anti-foreclosure efforts, including a planned program to convert foreclosed government-owned properties into rental units.
"By putting this out, this will certainly foster some public discussion, including discussion by members of Congress," DeMarco said. "It will foster debate about the future."
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