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FHFA Director Mark Calabria Provides Update on Conservatorship

On Wednesday, the American Enterprise Institute kicked off the Eighth Annual AEI-CRN Housing Conference [1], a two day event featuring eight panels of experts from AEI’s Housing Center and one panel of experts from the Collateral Risk Network, and a lunch keynote today from Federal Housing Finance Agency (FHFA) Director Mark Calabria.

Panels at the Housing Conference focused on the expansion of housing supply, historical mortgage risk, land prices, and the appraisal process. The conference kicked off with a panel on housing market indicators, presented by Tobias Peter, Senior Research Analyst, AEI Housing Center, and featured discussion with Svenja Gudell, Chief Economist, Zillow and Sam Khater, Vice President and Chief Economist, Freddie Mac. The panel was Industry Consultant Mark Goldhaber.

Speaking about the panelists, Gladhaber noted that they’ve “developed data that is really usable in a very practical way as we think about how to deal with the very evident supply shortage.”

In his keynote, Calabria gave an overview of the state of GSE conservatorship.

“I’m happy to say that in my time at the FHFA, we have doubled the capital of Fannie and Freddie,” Calabria told attendees. “I can’t promise that we can keep that pace up, but we are headed in the right direction.”

Speaking about conservatorship, Calbria stated that he “never thought [he] would see a conservatorship longer than six months.”

“I have a responsibility to fix them and get them out,” he added.

The GSE’s took an important step toward privatization when the U.S. Department of the Treasury (Treasury) and the Federal Housing Finance Agency (FHFA) recently announced that they had agreed to modifications to the Preferred Stock Purchase Agreements (PSPAs), permitting Fannie Mae and Freddie Mac to retain additional earnings in excess of the $3 billion capital reserves currently permitted by their PSPAs.

These modifications are an important step toward implementing Treasury’s recommended reforms that will define a limited role for the Federal Government in the housing finance system and protect taxpayers against future bailouts,” said U.S. Treasury Secretary Steven T. Mnuchin.

View the AEI-CRN Housing Conference schedule and live feed here. [1]