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Volume 18 - Number 6

March 16, 2018

Next Steps If Housing-Finance Reform Legislation Doesn’t Happen

Most experts agree that passing housing-finance reform legislation in 2018 now looks improbable, leaving the immediate future of Fannie Mae and Freddie Mac in the hands of the Treasury Department and the Federal Housing Finance Agency. Researchers at the Urban Institute say that if legislation remains stalled, the two GSEs could be placed into receivership and reconstituted. Laurie Goodman, director of UI’s Housing Finance Policy Center, said Fannie and Freddie could be wound down within five years, under the Housing and Economic Recovery Act, and be replaced by new entities with no government backstop. She noted that this scenario would leave the fate of government support for the GSEs’ legacy mortgage-backed securities unclear.

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Poll

With mortgage production down noticeably this year from 2017, how many lenders might disappear via M&A or failure during the next 12 months?

10% or less. It’s not that bad out there.
11% to 25%. It’s a challenging market.
25% to 40%. It’s going to be very ugly.
No opinion.

vote to see results