What's in Store for Fannie and Freddie? by ProQuest

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									                                                                 lender life                            o p e r a t i o n s




What’s in Store for

Fannie            and

Freddie?
Predicting the future of the two
                                                                                                  By Ann Grochala


government-sponsored enterprises
is challenging, but of crucial importance

W        hen the federal govern-
         ment placed Fannie Mae
and Freddie Mac into conser-
                                        in the future need to have the operational flexibility
                                        to hold some level of mortgages as market conditions
                                        dictate, along with their securitization authorities.
                                                                                                  Ann Grochala is vice president of
                                                                                                  ICBA lending and accounting policies.
                                                                                                  Reach her at ann.grochala@icba.org.
vatorship last September, the           The future secondary market for housing finance
action was meant to be tempo-           should continue to have some type of government
rary. The Obama administration          ties, demonstrating the importance of homeowner-
and Congress need to decide             ship to the American public.
the future of these government-            But what should the future structure of the second-
sponsored enterprises (GSEs)            ary market for residential mortgages be? What struc-
and, consequently, the second-          ture would best serve the needs of community banks?
ary market for residential mort-        If most community banks are to continue to offer
gages. Fannie Mae and Freddie           long-term, fixed-rate mortgages to their customers,
Mac continue to play a vital role       they need a vehicle that enables them to sell those
in supporting residential mort-         loans. That vehicle must not directly compete with
gage lending and homeowner-             them and must provide equitable access and pricing                if the future
ship, particularly in thes
								
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