[apology in advance – this post has more acronyms than you deserve.]
HUD says GSE reform would not affect housing prices [MW]. U.S. Housing and Urban Development Secretary Alphonso Jackson said Tuesday that the cost of housing would not change if Congress created a new regulator for Fannie Mae and Freddie Mac.
“HUD is supporting legislation that allows a regulator to limit the GSE’s portfolio to those investments necessary to carry out its mission, without trying to cripple or put it out of business,” Jackson said in a speech to the National Association of Mortgage Brokers.
Firstly, how can anyone say that with such confidence, especially a housing-related government employee? Even if you believe what he says, it makes me suspicious at the naivete.
You are tinkering with the GSE’s investments and that can have a potential affect on mortgage rates. Availability, pricing and volatility are all fair game.
This is a very delicate path to walk, I would think. Its not clear why OFHEO would not have this repsonsibility since they are responsible for the GSE’s. Although they were asleep at the wheel when former Fannie Mae executives supposedly did some things they were not supposed to, the last thing we need is another federal agency.
Why not gut, revamp or empower OFHEO to provide meaningful oversight to the GSE’s?