Real Estate Industry Groups Call on Congress to Enact GSE Reform
Last week, a coalition of real estate related groups including the American Bankers Association, the Mortgage Bankers Association, the National Association of Home Builders, the National Association of Realtors, and the National Housing Conference sent a letter to Federal Housing Finance Agency Director Mel Watt asking the FHFA to let Congress take the lead on comprehensive reform to the secondary housing finance system.
This letter comes after a group of Congressional Democrats asked the FHFA director to go around Congress and allow Fannie and Freddie to rebuild their capital. GSE’s are currently in conservatorship and must send their profits to the Department of the Treasury.
Comprehensive housing reform passed by Congress is certainly the right path forward, but many groups working in real estate continue to believe GSEs are necessary for market stability and access to credit when in fact the opposite is true.
Fannie and Freddie were one of the main causes of the housing bubble and subsequent collapse. They continue to crowd out private institutions from the marketplace and put taxpayer dollars at risk, even today. Responsibly removing GSE’s from the housing market altogether could stabilize the market and increase consumer choice by allowing private intuitions to return and engage in healthy competition once again.