Fear Not the GSEs, Mozilo Says

The mortgage market has nothing to fear from Fannie Mae and Freddie Mac, a key industry executive says.In a wide-ranging talk at the Western Secondary Market and Lending Conference in San Francisco, Angelo Mozilo, the outspoken chief executive officer of Countrywide Credit Industries, said the two government-sponsored enterprises "should not be viewed as rivals or adversaries." Concern has been voiced that the GSEs are seeking to broaden their roles in the mortgage banking arena at the expense of primary lenders. Some view Fannie Mae's ill-fated attempt to offer mortgage life insurance and Freddie Mac's incursion into the subprime arena as an indication that the GSEs will eventually attempt to bypass traditional lenders and go directly to consumers. But Mr. Mozilo, who was president of the Mortgage Bankers Association earlier this decade, said it is "unlikely" that will occur and called such fears "nonsense" in his keynote speech at the conference, which attracted about 750 registrants and was co-sponsored by the Western League of Savings Institutions and the California Mortgage Bankers Association. "Originating loans is heavy lifting," he said. "But they're not stupid. They want to leave the lifting to us." While the GSEs have occasionally stepped on the industry's toes, he added, they have "responded positively" every time industry leaders have called them to task. "The GSEs are your friend, not your enemy," he said.