“One way that the government could retain some control of [the GSEs] is to keep a sufficient number of shares so that they control the board of directors for the two entities,” Green said, “so they could go ahead and facilitate a lot of the changes that they want to make with respect to the charters or other things [related] to how the GSEs operate.”
The cases for and against an imminent end to conservatorship
In December, Mortgage Bankers Association (MBA) senior vice president and chief economist Mike Fratantoni highlighted potential benefits to the mortgage market of bringing Fannie and Freddie out of conservatorship, including an end to sometimes “frustrating” government intervention in the GSEs.
“When you’re dealing with another business, sometimes there can be a sort of market sensitivity and responsiveness that’s [often] just not there with a government organization, which necessarily acts at a more methodical pace,” he told MPA.
But a letter from senior Democratic lawmakers led by Senator Elizabeth Warren last week urged the Trump administration to pause its plans to release the GSEs, citing potential risks to housing affordability.
If not planned well enough, more than a dozen Senators said in a letter, changes at Fannie and Freddie could see costs “dramatically increase” for families hoping to purchase a home and “[make] the housing crisis even worse.”
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