GSE Reform Efforts More Likely to Include Reformed Version of Fannie, Freddie

A recent article in the Wall Street Journal highlights the changing mood on GSE reform, noting that previous attempts to abolish Fannie Mae and Freddie Mac have collided with market realities in ways that may ensure their continued existence in a future housing finance market. The article notes that while legislative and reform efforts from the Obama administration focused on winding down the two GSEs, such attempts were unsuccessful, and have since given way to a reality where both GSEs continue to exist, albeit with a series of changes – including in particular the credit risk transfer program – they have undertaken during their time in Conservatorship.

Senator Mark Warner (D-VA), who previously introduced bipartisan legislation to reform the GSEs along with his Senate colleague Bob Corker (R-TN), is currently working on new legislation, which may be released as early as January. On Friday, December 15th, Senator Warner stated, "We're looking for a more simplified approach that protects the taxpayer, preserves the 30-year fixed mortgage and includes stronger access and affordability provisions."

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