White House walks back Otting comment on imminent GSE reform

Two weeks ago, Federal Housing Finance Agency Acting Director Joseph Otting told staffers the agency was weeks away from announcing a plan to take the GSEs out of conservatorship, saying that the administration would not wait on Congress and that significant headway would be made within six to 18 months.

“In the next two to four weeks you’re going to be able to see some communication that comes out of the White House and Treasury that really sets a direction for what the future of housing will be in the U.S. and what the FHFA’s part of that will be,” Otting said during a staff meeting, according to a recording obtained by Politico.

The buzz surrounding the Trump administration’s expressed desire to end the conservatorship of Fannie Mae and Freddie Mac has sent shares of both agencies into the stratosphere, soaring 170% over last year as Wall Street bet its long-term goal for GSE privatization is on track to fruition.

But on Tuesday the White House issued a statement that appeared to walk back Otting’s comments, dampening hopes for immediate action and causing shares of both GSEs to slip 12%.

“The White House expects to announce a framework for the development of a policy for comprehensive housing finance reform shortly. At this time, no decisions have been made on any reform plan. As part of the process, however, the administration will work with Congress to formulate a plan that fully addresses the risks to taxpayers presented by the current housing finance system and that improves the ability of creditworthy Americans to buy a home,” White House Spokeswoman Lindsay Walters said in a statement.

Otting’s remarks to staffers drew the ire of congressional Democrats who demanded that he offer up evidence of the Treasury Department‘s plans to end the conservatorship.

House Financial Services Committee Chairwoman Maxine Waters, D-CA, and the Senate Banking Committee’s Sherrod Brown, D-Ohio, demanded in a letter to the FHFA that Otting provide a copy of any working plans regarding GSE reform and that he detail his plans for the FHFA.

For its part, the White House made it clear that any move to privatize the GSEs will be a collaborative effort that will include congressional input, and sources say a number of federal agencies will be asked to weigh in.

According to an article in Bloomberg that cited unnamed sources familiar with the matter, GSE reform is likely to start with a call to federal agencies to present ideas on potential steps for a legislative and regulatory overhaul.

The White House may release a broad set of recommendations that could include ideas on protecting taxpayers from losses and increasing competition for the companies, and then it might request that the Department of Housing and Urban Development and Treasury Department suggest plans for implementation, Bloomberg wrote.

It seems that despite the administration’s desire to move things along, the much-anticipated end to Fannie and Freddie’s conservatorship is still a long way off.

Article source: https://www.housingwire.com/articles/48046-white-house-walks-back-otting-comment-on-imminent-gse-reform

Leave a Reply

WP2FB Auto Publish Powered By : XYZScripts.com
Bunk Beds