One area of consensus in Fannie Mae/Freddie Mac reform that is emerging in at least one of the two main political camps eyeing the issue could be an entity or entities that provide an explicit guarantee and insurance wrap on mortgage-backed securities.
This is part of the consensus of parties that include industry groups and a progressive think tank with ties to the Obama administration, Ann Schnare, president of consultancy A.B. Schnare Associates, told attendees during a Securities Industry and Financial Markets Association panel discussion on government-sponsored enterprise reform in New York.
She said GSE reform backed by this political camp could also involve an insurance pool that would absorb some of taxpayers’ losses. In contrast, conservatives, Republicans and academics are still pushing for privatization of Fannie and Freddie although perhaps not for the Federal Housing Administration.
This camp acknowledges the government guarantee issue has to be considered carefully in reform but generally consensus on which to build GSE reform is still considered elusive.
