Fannie Mae exec says Congress must act on GSEs
Tim Mayopoulos (Dietsch photo)
Sept. 10, 2013 – Fannie Mae and Freddie Mac are returning dividends to the U.S. Treasury for its investment in the conserved entities, but Fannie Mae’s president told NAFCU’s Congressional Caucus Tuesday that the country can’t wait five more years for their resolution.
Tim Mayopoulos, president and CEO of Fannie Mae, acknowledged the debate over whether there should be a government role in the future housing finance system, and he said among those who believe there should be such a role, there is still disagreement about its extent.
No matter what shape the future housing finance system takes, he said, “returning to the old way and returning to the old Fannie Mae is not and should not be an option.”
Mayopoulos said Fannie Mae sees credit unions as “crucial to the success of housing finance in the future,” that credit union loans are “consistently very high quality” and that the current system does work to ensure fair pricing.
As for reform, he warned against attempting a complete overhaul of the current system, but he said any future system must correct defects in the old one. He added that if the 30-year, fixed-rate loan is to be preserved, the government must have a role.
Fannie Mae and Freddie Mac recently completed five years of conservatorship. Asked by an audience member if it may be another five or 10 years to get out of it, Mayopoulos said that runs the risk of the entities “degrading and becoming debilitated over time.”
He added, “I don’t think there’s a solution for coming out of conservatorship short of congressional action . . . Congress needs to decide when conservatorship is to end.”
In related news, reports this week say the Federal Housing Finance Agency is preparing to lower loan limits for both Fannie and Freddie (Reuters).
NAFCU Congressional Caucus