Just as the Trump administration appears focused on releasing a framework without Congress, the Senate Banking Committee has re-entered the policy fray with a new proposal.
The Senate Banking Committee chairman released an outline for overhauling the U.S. housing finance system more than 10 years after the government put Fannie Mae and Freddie Mac into conservatorship.
As policymakers consider administrative reforms to Fannie and Freddie, they must address the problem of capital arbitrage to avoid overleveraging the mortgage system.
The Trump administration will offer a framework and get Congressional input on housing finance; some online banks offer more than 2% interest on deposits.
A White House spokeswoman said the administration wants to work with Congress on a housing finance reform plan, providing evidence that changes might not be imminent.
Fixing the housing finance system is "the last piece of unaddressed business from the financial crisis," according to a summary of to-do items released by the Banking Committee's chairman.
The acting head of the Federal Housing Finance Agency has promised substantial changes for Fannie Mae and Freddie Mac, but the exact mechanics and timeline of an administration plan are still a mystery.
Recent comments attributed to the acting head of the Federal Housing Finance Agency (who is also comptroller of the currency) have stoked speculation about the Trump administration’s housing finance policy.
Timothy Mayopoulos is back in the mortgage industry, becoming the new president of the digital mortgage technology developer Blend, months after leaving his post as Fannie Mae’s CEO.
