Federal 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 would impact America’s most popular loan: the 30-year fixed rate mortgage.
“I see my goal as setting a path to end the conservatorship” for the companies, he said, adding that “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 continued.
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.