Earlier this week at the Mortgage Bankers Association annual convention in Las Vegas, FHFA director Mel Watt gave us some more detail about the upcoming Common Securitization Platform (CSP) that will be used by Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC), which raises questions about whether he really wants to wind down the GSEs. Remarks from Fannie Mae and Freddie Mac CEOs at the same convention also give the impression of agencies that intend to be around for a long time, as each outlined their vision for the future.
Freddie Mac priorities don’t look like an agency winding down
“GSE reform does not mean just legislative action,” said Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) CEO Donald, MBA reports. “Non-legislative GSE reform has been going on and continues to be strong and I personally expect it will affect us for the next few years, led by [the Federal Housing Finance Agency] in its role as conservator of the two GSEs.”
Layton says that he wants to reduce taxpayer exposure to the mortgages backed by Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC), to move forward on CSP, and to increase market share among small lenders. The third goal doesn’t make sense if you believe that you are going to close shop in a couple of years, while the first and second are clearly aimed at answering Congress’s biggest complaints about the GSEs without actually requiring Congressional action.
Fannie Mae developing new tools for mortgage originators
“Our goal is to continue to be the leading player in the secondary mortgage market by being your most valued business partner. At Fannie Mae, we are focused on serving you, and we look forward to winning with you in the future,” said Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) CEO Timothy Mayopoulos.
Even once you get past the PR-speak, the message is clear: Mayopolous is focused on building Fannie Mae up, not tearing it down. The agency even announced another tool to help mortgage originators streamline the process of selling loans to Fannie Mae – the Collateral Underwriter to go along with Desktop Underwriter and Early Check – and apparently there are other free, automated tools under development. There’s still a lot of mess to sort out with the GSEs, but the people inside are planning on sticking around for a while.