Look Beyond the GSEs in Housing Reform Debate

Fannie Mae's Aug. 5 announcement that it turned the corner on its losses and sees its credit book emerging from the mortgage crisis stronger than ever highlights the high stakes that policymakers will be playing for beginning on Aug. 17. That's when the Obama administration convenes in Washington the first of a promised series of conferences on the federal government's future role in mortgage finance.

We believe federal support is a critical part of sustaining a deep and liquid supply of capital for housing to meet the needs of a growing and changing population. But one lesson from the mortgage crisis is that such support should be explicit, transparently and effectively priced and guarantee only the securities backed by qualified mortgages — not the financial services entities that create those securities, such as Fannie Mae and Freddie Mac.

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This article was originally published in American Banker.