Industry Heads Agree on Explicit Government Guarantee for Fannie and Freddie

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Posted To: MND NewsWire

The second in a scheduled three-part hearing on Sustainable Housing Finance was held on Thursday by the Housing and Insurance subcommittee of the House Financial Services Committee (FSC). This hearing focused on “Private Sector Perspectives” on Housing Finance Reform. All of those testifying before the committee appeared to agree there should be an explicit government guarantee at the mortgage-backed security (MBS) level, and strong standards for the underlying collateral. Fannie Mae and Freddie Mac (the GSEs) would act as guarantors, possibly along with other entities chartered as competition. Jerry Howard, CEO of the National Association of Home Builders (NAHB), laid out one scenario for how the system could work. What he called private Housing Finance Entities (HFEs) would be authorized…(read more)

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