10.4.19
The policy of Fannie’s and Freddie’s move towards privatization is a major step in housing reform, but there are still questions about the long-term viability of the recent shift. The end of the “net worth sweep,” which required Fannie and Freddie to return all but $3 billion of its profits to the U.S. Treasury, improves their capital in the short term, but does little to plan for privatization in the long-term. Given this, policymakers have been left wondering how much capital Fannie and Freddie need. While this question remains unanswered, there is time for such decisions to be made. “What’s next is what it’s always been,” said Ed Mills, a policy analyst at Raymond James. “GSE reform is an incremental process.”
Read more via American Banker.