Federal Housing Finance Agency acting director Edward Marco told a group of business economists that he wants Fannie and Freddie to build the new MBS platform. But eventually the platform would be independent of Fannie and Freddie and have its own chief executive and board of directors.
He stressed that the GSEs’ securitization infrastructure needs updating.
“Our objective, as we stated last year, is for the platform to be able to function like a market utility, as opposed to rebuilding the proprietary infrastructures” of Fannie and Freddie, DeMarco said Monday evening.
The new securitization platform would initially be owned and funded by the GSEs. But once it is established, policy makers could use it as a “foundational element” for a new mortgage finance system, the GSE regulator said.
The FHFA sought public comment on its securitization platform concept last summer. And several trade groups—including the Mortgage Bankers Association and American Bankers Association—raised objections particularly about the ownership structure.
DeMarco stressed that the new platform will be “physically located” away from Fannie and Freddie. “Importantly, we plan on instituting a formal structure for input from industry participants.”
The GSE regulator also noted in his speech that Fannie and Freddie laid the groundwork for doing credit risk-sharing transactions last year.
Now the FHFA has set a target for both Fannie and Freddie to complete $30 billion in single-family risk-sharing transactions in 2013.