Fannie Mae President and Chief Executive Officer Timothy Mayopoulos acknowledged that the government-sponsored enterprise still is playing too big a role in the mortgage market and noted a concerted effort to attract private capital to the mortgage business, National Mortgage News reported Oct. 22.
Speaking at the Mortgage Bankers Association’s annual convention in Chicago, Mayopoulos said that four years after the housing market collapsed there has been little private capital entering the market, National Mortgage News reported.
Currently, Fannie Mae has more small and mid-sized mortgage bankers selling directly to it, a result of deconsolidation in which some participants reduced their involvement as whole loan purchasers, National Mortgage News reported. Large aggregators previously had absorbed the risk of smaller players, but now Fannie has assumed that risk.
Mayopoulos told the conference that his counterpart at Freddie Mac, Donald Layton, also is trying to build a new and improved infrastructure for housing finance.
Meanwhile, Carol Galante, acting commissioner for the Federal Housing Administration, told the conference that her agency’s future role is tied to the future of the GSEs, National Mortgage News reported. Any adjustments must be synchronized so all borrowers are covered.
Matthew Feldman, president and CEO of the Federal Home Loan Bank of Chicago, cited the secondary market programs of his 12 FHLBs as models for what future mortgage programs could be. He told the conference that one of the most significant elements of the FHLBs is the requirement that lenders have “skin in the game” for loans sold into its Mortgage Partnership Finance program.
Feldman noted that in the future, the FHLBs presence in the secondary market could be either as aggregators or as financial intermediaries, and noted the “MPF Extra” program, which currently sells loans to Fannie Mae and is being expanded to sell to other groups, National Mortgage News reported.
Feldman told the conference that securitization does not need to occur at the FHLB level, but at a point where it offered the greatest benefit for its members, National Mortgage News reported.