Page 24 - The GSE Report March-April 2018

FANNIE MAE AND FREDDIE MAC MJARN.U-ARPYR.20210818
FANNIE MAE AND FREDDIE MAC
It could be a long wait for housing finance reform
“Unfortunately, I just don’t think [housing finance reform] is going to be a focus in this Congress,” Treasury Secrtary Steven Mnuchin in Fox Business interview. “But we’ll come back to this next year and this will be a big focus of mine post the elections.” (American Banker, Neil Haggerty, 04/30/18)
In The Cowen Insight, Jaret Seiberg, a policy analyst for Cowen Washington Research Group, voiced pessimism about the prospects for GSE reform in the 116th Congress. If the Democrats win the House in November, Representative Maxine Waters would serve as the chair of the House Financial Services Committee. Housing finance reform will not be at the top of Waters’ priorities, according to Seiberg. Even if the Republicans retain the House, Seiberg questions if GSE reform will be a priority of any of the frontrunners poised to replace Chairman Hensarling (R-TX).
Seiberg expects the GOP to retain control of the Senate and Senator Pat Toomey will likely chair the Senate Banking Committee. “[W]e don’t see how he could find common ground with Rep. Waters, we believe the next Congress will be more about hearings and headlines than about substantive efforts to legislate on Fannie and Freddie,” wrote Seiberg.
Will President Trump attempt to enact material GSE reform in 2018 after appointing a new FHFA director after Mel Watt’s term expires in January? Seiberg wrote:
We have doubts ...[that] the White House [will] quickly nominate a replacement [for Director Watt]. Then the Senate would need to quickly vote to confirm this individual.”
...[W]e believe the next sweet spot for action will be in 2021 after the election. The 117th Congress will convene in January and we believe there will be an 18-month window to try to get a bill to the finish line. ... This does not mean complete inaction. There will be lots of efforts administratively and legislatively to create a foundation for GSE reform. We just don’t see those efforts reaching a finish line now until the 117th Congress.
Editor’s Note:
If housing reform is finally enacted in 2022, Fannie Mae and Freddie Mac will have languished in receivership for as much as 14 years. During the GSEs’
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