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Fannie Mae’s and Freddie Mac’s Impact on Loans

Video Spotlight

Fannie maeFederal Housing Finance Agency (FHFA) Director Mark Calabria is aiming for privatization of Fannie Mae and Freddie Mac. In this video Spotlight, the Wall Street Journal discusses how restructuring the GSEs will impact America’s most popular loan: the 30-year fixed rate mortgage.

In an interview with the Wall Street Journal, Calabria stated that he wants to out the now-profitable GSEs back into private hands, something that has been tried and failed by lawmakers in the past.

“I see my goal as setting a path to end the conservatorship” for the companies he said, adding, “they have to be stronger, healthier companies” compared to before the 2008 housing crisis.

“My objective is to get us to a spot where we don’t have to worry about the system blowing itself up,” he added

Among Calabria’s concerns is the “qualified mortgage patch,” which allows more highly leveraged homebuyers to obtain Fannie and Freddie-eligible mortgages. Patch usage has grown in the last few years, and according to Calabria, changing the patch would be a key tool to shrink Fannie and Freddie without a full overhaul, though he states that he does not intend to do away with it entirely.

“I can draw Fannie and Freddie a map,” he said. “Fannie and Freddie are going to have to be the ones who meet the mileposts.”

Calabria stated that he is awaiting completion of plans ordered by President Donald Trump to refashion the mortgage system, set to be completed around June.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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