The government is currently maximizing options for Fannie Mae and Freddie Mac post conservatorship, the Federal Housing Finance Agency said Tuesday, but it has yet to work out its long-term strategy for reforming the two mortgage giants, which for now will be kept in their current form. Meanwhile, analysts say the private sector is unlikely to step into the mortgage market to provide alternative sources of funding until there are clear signs housing is stabilizing. In that regard, the private sector’s reaction to the termination of the Federal Reserve’s purchases of mortgage-backed securities will be a first test, and here, the Federal Housing Finance Agency expressed confidence Tuesday the private sector will in fact pick up the slack.
Analysts: Private Capital Unlikely to Fill In For GSEs Soon
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