Fannie Freddie Reform is a hot item that we’ve been talking about for quite a long time. It looks like it’s coming down the pipe soon. Hear what MBA President David Stevens has to say about it.
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Stevens talks about protecting small lenders. Interesting six speakers representing small banks and credit unions testified last week in front of Senate Banking Committee and were OPPOSED to (MBA plan) creating a system with several GSE’s in operation. MBA has proposed rechartering Fannie & Freddie as private utilities and allowing government to charter other companies to compete with them. None of the 6 speakers from American Banking Assoc., Credit Union Nat’l Assoc., Nat’l Assoc of Federally-Insured Credit Unions, Independent Community Bankers of America, Community Mortgage Lenders of America and Community Home Lenders Assoc., were in favor of multiple GSE’s. Op Ed written in American Banker by Michael Jones, CFO of Georgetown Mortgage and director of Community Mortgage Lenders of America, writes “from this small lenders point of view, most GSE reform proposals offer, in very clever and disguised ways, designed to advance interests of big bank lenders at expense of companies like mine and consumers whose mortgage needs we serve. Goes on to write “MBA plan silent on policing a tool the big bank lenders can use to achieve same objective as volume discounts: upfront risk-sharing. Huge loophole for big banks and wall street. MBA plan would allow a consortium of big bank lenders to form their own direct competitor to Fannie and Freddie that would be authorized to issue mortgage-backed securities with a full-faith-and-credit guarantee from the federal gov’t aka the American Taxpayer. And since banks could buy these securities and hold zero capital against their investments, can you imagine the type of leveraging and fancy financial structures the big banks and Wall Street investors could employ with massive holdings of zero-capital mortgage securities?” There has been much written by small to medium lenders arguing that MBA plan puts them at a competitive disadvantage so I encourage your followers to google and read full article like the above or HousingWire.com “Small Lenders to congress:Here’s the GSE reform we don’t want to see” or CMLA/Joint Statement on GSE Reform Principles. This is very important issue facing all of us so I advise all to not just listen to 1 advocate for GSE reform.