American Banker: White House pushes surprise Fannie, Freddie reform plan, but is it workable?
American Banker, June 21, 2018: White House pushes surprise Fannie, Freddie reform plan, but is it workable?
The proposal would position HUD to oversee affordable housing objectives, and “the newly fully-privatized GSEs would have mandates focused on defining the appropriate lending markets served in order to level the playing field with the private sector and avoid unnecessary cross-subsidization.”
Fees on MBS issued by guarantors would go toward affordable housing goals administered by HUD through the Federal Housing Administration.
“The proposal would be designed so that the affordable housing fees transferred to HUD would enable FHA to provide more targeted subsidies to low- and moderate-income homebuyers while maintaining responsible and sustainable support for homeownership and wealth-building,” OMB said.
But Jesse Van Tol, chief executive of the National Community Reinvestment Coalition, blasted the proposal over the changes to affordable housing.
“By eliminating affordable housing goals from the conventional mortgage market, lenders can choose to loan only to the well-heeled rich and ignore everybody still working their way up the economic ladder,” he said in a press release.