Fannie Mae president and CEO Timothy Mayopoulos said the GSE recognizes the outsized role it is playing in the mortgage market but is working on trying to attract more private capital to the business.
Still, nearly four years after the housing bust, there has been scant evidence of private capital coming into the market, he told attendees at the Mortgage Bankers Association’s annual convention in Chicago.
There has been some deconsolidation in the business with certain larger players
In the past, large aggregators had absorbed the risk of smaller players but now Fannie is taking on that risk. The marketplace has all sizes of lenders and everybody should have the same access to the secondary market, Mayopoulos said.
His counterpart at Freddie Mac, Donald Layton, said his GSE is working to build a new and improved infrastructure for housing finance, referencing, the
Acting FHA commissioner Carol Galante noted that her agency’s future role is linked with the future of the GSEs. The movement must be synchronized to avoid leaving out groups of borrowers, she said.
Matthew Feldman, president and CEO of the Federal Home Loan Bank of Chicago mentioned the secondary market programs of the 12 FHLBs as models, with such features as requiring lenders to have “skin in the game” for loans sold to into the ‘Mortgage Partnership Finance’ program.
In the future, the FHLBs’ secondary market role could be as either aggregators or as financial intermediaries. In prefacing this remark, he pointed to the "MPF Extra" program, which currently sells loans to Fannie Mae. The program is now looking to expand to sell to other entities.
From the FHLB of Chicago’s point of view, securitization does not have to happen at the FHLB level, but at a point where it provides the most benefit for its members, Feldman said.
“Mortgage lenders of all sizes must have equal access” to the secondary market, he said.
