There will be an increasing cry of 'not fair' from the Perry Capital's of the world as Jeb Hensarling unveils a dramatic plan to overhaul the GSEs (and broad housing finance in general). The chairman of the House financial services committee wants Fannie and Freddie to be wound-down within 5 years - removing the explicit government guarantees and demanding that:
- *HENSARLING SAYS HE WANTS HOUSING POLICY FOCUSED ON TAXPAYER
and not:
- *HENSARLING: U.S. HOUSING FINANCE CAN'T BE DESIGNED FOR INDUSTRY
Higher down-payments for FHA loans, limited to first-time-homebuyers only, and reducing the conforming loan-limits are all likely to drive the hedge funds to more litigation and complaint that this will end the housing recovery and their dividend stream. Hensarling wants to create a securitization platform 'utility-like' entity with the government serving only as a catastrophic reinsurer.