Panelists Discuss Future of Mortgage Market

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Is getting rid of Fannie Mae and Freddie Mac a good idea or should we keep them in place and just make major changes in how they do business? Please read the article below and let us know what you think.

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When Ron D’Vari and Thomas Heinemann discussed the possible winding down of Government Supported Entities (GSEs) Fannie Mae and Freddie Mac, one thing both agreed on was that possible reform of government’s role in the mortgage market needs to be preceded by sweeping changes in how loans are provided and capitalized.

“GSE reform is badly needed,” said D’Vari , Co-Founder and CEO of NewOak Capital. “But other issues have to come ahead of this. Provided the right transition and the right preparation, there is capital in the market.”

Heinemann, a senior legislative advisor in the Department of Housing and Urban Development, said that coming regulations will tighten the market, but only time will tell how the market will adjust. “I think we’re about to enter what could be a very interesting time on the Hill,” Heinemann said. “What are the new rules of the road? I think what you’ll begin to see is a gradual scaling back of government support. A lot of things are happening that are meant to bring back private capital.”

D’Vari suggested that the government’s role in the housing market simply couldn’t be maintained. “We have created too much of an intersection between politics and the market,” D’Vari said. “We have created a big monster for ourselves. There is no precedent for the way the US housing market works. By every historical measure we are off the charts.”

To see the original article please use the link below.

Future of Mortgage Market

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