A Fannie Mae And Freddie Mac We Could Live With

A Fannie Mae And Freddie Mac We Could Live With

Fannie Mae

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A Fannie Mae And Freddie Mac We Could Live With by Investors Unite

The steady drumbeat of people weighing in on how to reform Fannie Mae and Freddie Mac continues with an op-ed from Mark Calabria and Alex J. Pollock in The Hill headlined, Making a Fannie and Freddie We Could Live With.

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The impetus for the specific proposals they lay out is bringing an end to the current “conservatorship limbo, where they are run by their regulator as wards of the state, with de minimis capital.” Calabria is a former top aide on the U.S. Senate Banking Committee staff who played a key role in drafting the Housing and Economic Reform Act, which created the conservatorship as a short, interim step toward returning the to a “safe and solvent” condition.  Pollock is the former President and CEO of the Federal Home Loan Bank of Chicago. The current stalemate over a long-term solution and the ongoing undermining of the rule of law is clearly no longer acceptable to these policy experts.

The piece is a quick read comprised of seven steps that Congress could take now to “take away all [of] Fannie Mae’s and Freddie Mac’s special privileges” and make them competitive in the housing market. Once the steps are taken, Calabria and Pollock suggest that the GSEs could then be taken out of conservatorship. Investors Unite isn’t endorsing their seven-step plan but we wholeheartedly endorse and appreciate the growing sentiment that it’s time to follow HERA and to put Fannie and Freddie on the path to safety and soundness. From the op-ed:

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“In spite of endless discussions of reform, they remain in conservatorship limbo, where they are run by their regulator as wards of the state, with de minimis capital.  Nobody wants the old Fannie Mae and Freddie Mac back; nobody wants them to stay on indefinitely in conservatorship. What is required are practical steps forward, rather than designing the ideal but politically unachievable solution.”

Calabria and Pollock suggest that the threat of receivership for the GSEs continues to hang over the mortgage finance arena. That threat seems to us to be sufficient incentive for the powers-that-be to put Fannie Mae and Freddie Mac on a solid footing, complete with adequate capital reserves and a competitive structure, as envisioned under HERA.

More from Investors Unite

  • Teleconference: New Paper Shows Conservatorship of Fannie Mae and Freddie Mac Does Not Comply with the Law
  • Here’s how to really help families obtain housing
  • Investors Unite Member Rings Bell at NASDAQ
  • FHFA Townhall Meetings in Atlanta, Detroit and Miami
  • Happy New Year!

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  1. No longer acceptable to these policy experts? since then the crooks change heart? These two destroying many life savings now acting like hero? What kind the hypocrite is that? They better get the life!

  2. The survival of the entire US financial system rests squarely on the shoulders of a lady you know as Fannie Mae. She can put you in a house you can’t afford, she can make that stupid SUV loan and credit card balance disappear. She’s the girl who stokes the housing market with dizzy dumb money that gets appraisals up. Yeah, she’s all that and a whole lot more.

  3. who says “nobody wants the old “Fannie /Freddie”? They worked fine for DECADES when managed correctly. What we need IS the old Fannie / Freddie that was BEFORE the melt down.

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