Lack of GSE Resolution Disappoints Lockhart

The Bush Administration appointee who took Fannie Mae and Freddie Mac into conservatorship 17 months ago is disheartened that the Obama Administration has put off resolving the future of the two government-sponsored enterprises. James Lockhart, who is now vice chairman of WL Ross & Co., a private equity firm which owns American Home Mortgage Servicing and a 25% stake in Bank United, told the Midwinter Housing Conference in Park City, Utah, that he is "disappointed" the White House has "taken a pass" on Fannie and Freddie this year. The former director of the Federal Housing Finance Agency, the GSEs' regulator, said, "the whole servicing world has to be re-thought." But starting to rethink the whole mortgage business is an even "more critical issue," he added. "At some point, we need to attract the private sector back into the market." Meanwhile, another Bush appointee, Joseph Murin, who headed the Government National Mortgage Association for two years, told the conference that it's time for Congress to cut Ginnie Mae loose from the Department of Housing and Urban Development. "An entity with such a critical mission can no longer be treated as if it just another program office" within HUD, said Mr. Murin, who founded the Collington Group advisory firm when he left Ginnie Mae last year. If Ginnie Mae "is to fulfill its mission in the years ahead," he said, "it requires a structure that provides for its independence and the ability to respond to the always changing secondary markets." Otherwise, the agency's ability to continue to provide liquidity "will be severely compromised."