The Federal Housing Finance Agency announced plans to create a new entity that will replace and consolidate some of the mortgage buyers' infrastructure.
However, more clarity is needed on goals for new federal plans to reform both Fannie Mae and Freddie Mac, said President and CEO David Stevens of the Mortgage Bankers Association.
"This latest proposal of a single platform and a new entity (owned and funded by Fannie Mae and Freddie Mac) to manage it, is just one piece of a much larger puzzle that impacts borrowers, lenders and the market as a whole. What is the ultimate objective? How would the creation of this new entity, owned by Fannie Mae and Freddie Mac, impact their potential restructuring and how would it affect other market players like FHA and private investors," Stevens questioned.
Transparency throughout the process to engage with stakeholders by articulating objects and alternatives to demonstrate concerns should be evaluated and addressed, which has been encouraged by many players in the space such as the MBA and the Bipartisan Policy Center and policymakers.
"The administration, Congress and regulators need to engage with other stakeholders to move the ball forward. Until this happens, the uncertainty in the markets will persist, and a full recovery of the housing market will remain elusive," Stevens said.