What should be done with the GSEs, regardless of how the various shareholder suits come out?
That’s the focus this article by American Banker which delves into how the FHFA can put an end to conservatorship.
The situation is untenable....
However, a solution is feasible that would bring private capital back to housing markets, prevent future taxpayer bailouts of the agencies in all but extreme scenarios, and address the issues that precipitated the demise of the GSEs is feasible.
This solution is already possible within the Housing and Economic Recovery Act of 2008 by granting the Federal Housing Finance Agency authority to bring the housing GSEs out of conservatorship. It is important to keep in mind that conservatorship was not meant to be a long-term solution for the GSEs and the same broad powers that allowed the federal government to place the agencies into conservatorship also allow it to reconstitute both companies.
Read the full article here.