Bair: After Broad Reform, Focus On GSEs

Posted by Orb Staff on June 21, 2010 No Comments
Categories : Residential Mortgage

ongress has finalized its financial reform efforts, lawmakers and regulators must turn their focus to reforming government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, Federal Deposit Insurance Corp. (FDIC) Chairwoman Sheila Bair said in a speech last week. Speaking to the Wharton School – University of Pennsylvania International Housing Finance Program Friday, Bair said there are a ‘variety of options for making some of [the GSEs'] functions governmental while putting others in private hands.’ What lawmakers must avoid doing, the FDIC head said, is continuing the GSEs' quasi-governmental status. ‘To the extent that the government wishes to promote homeownership and stability in the availability of mortgage finance, some level of ongoing government involvement is certainly justified,’ Bair said. ‘However, a lesson of the mortgage crisis is that any such program must be much more definitive about where the financial obligation of taxpayers begins and ends.’ Federal subsidies for the GSEs in 2009 and 2010 are estimated at over $300 billion, she said. SOURCE: [link=http://www.fdic.gov/news/news/speeches/chairman/spjun1810.html]FDIC

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