Several financial and housing groups — including ABA — today called for Congress to tackle comprehensive reform of Fannie Mae and Freddie Mac. In a letter to Federal Housing Finance Agency Director Mel Watt, the associations said that policymakers must focus on fixing the structural flaws that led to the collapse of the housing finance system during the financial crisis in order to protect taxpayers, preserve access to credit and ensure stability in the housing market. While they acknowledged the work FHFA has done to address the GSEs’ operational issues and foster transparency, they added that sweeping reform of the system is the only way to prevent another financial crisis.
“[T]he current state of conservatorship has provided stability, but policymakers and stakeholders need to continue to work together on the important efforts to advance housing finance reform through a legislative solution,” the groups wrote. “Absent reform, we run the risk of continuing to kick the can down the road without ensuring ongoing access to mortgage credit for millions of future homeowners.”