Now that Fannie Mae and Freddie Mac are running on government life support, credit unions are wondering whether they can lend without an accessible secondary market and, if Fannie and Freddie go, if a reformed, privatized secondary market would really be accessible to originators with small volumes. In the current market, Fannie, Freddie and the Federal Housing Administration are buying well over 90% of the mortgages that are sold, reports Geoff Bacino, president, Bacino and Associates. Yet closing the secondary market to CUs is not an imminent threat. Reform plans are being floated, but everyone is posturing at this point, Bacino suggests. The Federal Home Loan Banks are sometimes seen as the savior of the secondary market and the model for any future solution. After all, they are a GSE; they already provide important liquidity to mortgage lenders; they are solvent, and have never required a dime of government assistance, according to Alex Pollock, former president, Federal Home Loan Bank of Chicago.
Operations The New Mortgage Market Are Fannie and Freddie road kill? Is there home loan life for CUs af
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