FHFA Voices In On Future Of GSEs: To Be Reconstituted Under Charters
More wishful thinking and generic talking points from the FHFA which will end up being the opposite of what will end up happening. In the meantime, still no update on proposed GSE regulation or why they are still not included in the Federal Budget. From Dow Jones:
WASHINGTON (Dow Jones)--The U.S. government "remains committed" to reducing the size of Fannie Mae (FNM) and Freddie Mac's (FRE) retained loan portfolios over time, the firms' regulator said Tuesday.
Edward DeMarco, acting director of the Federal Housing Finance Agency, said in a letter to House and Senate lawmakers that the two companies will be limited to holding no more than $810 billion in their retained portfolios by the end of 2010. Both firms are currently under that figure, which will be reduced by 10% annually.
"I am instructing each Enterprise to develop a detailed plan for how it will manage its portfolio to stay within those limitations," DeMarco wrote.
The letter outlines the steps the FHFA have taken with the firms since they were placed under government control, or conservatorship, in September 2008. While that process has worked thus far, DeMarco urged lawmakers to start discussing what role the companies should play in the mortgage finance market going forward.
"There are a variety of options available for post-conservatorship outcomes, but the only one that FHFA may implement today under existing law is to reconstitute the two companies under their current charters," he wrote.
The letter comes as the Obama administration is wrestling with what to do with the two firms while also trying to push financial regulatory legislation through Congress. Officials had said an update would be provided with the fiscal 2011 budget, which was released Monday, but no details or information were released.