As policymakers continue to mull over the possible dissolution of Fannie Mae and Freddie Mac, a new survey shows industry professionals support the continued—albeit reduced—presence of the two mortgage giants in the market.
In a report released Monday, the Collingwood Group said that 65 percent of lenders and other mortgage industry workers support the push for GSE reform, calling their current state of conservatorship under the Federal Housing Finance Agency (FHFA) unsustainable.
At the same time, none of the survey respondents called for a wind-down or elimination of the GSEs, calling instead for administrative changes and the addressing of issues ranging from "aggressive put-back tactics" to the companies' overwhelmingly dominant position in the market, which some firms see as the government crowding out the private sector.
The Collingwood Group's findings run counter to tactics taken by lawmakers like Tim Johnson (D-South Dakota) and Mike Crapo (R-Idaho), the heads of the Senate Banking Committee and authors of a bill designed to dissolve the GSEs and replace them with a government corporation that has a more limited role.
Having passed a committee vote against the wishes of many Democrats, the Johnson-Crapo bill has yet to see a full Senate vote, despite support from the Obama administration. Critics of the legislation, including committee members Charles Schumer (D-New York), Elizabeth Warren (D-Massachusetts), and Sherrod Brown (D-Ohio), say it doesn't do enough to provide affordable housing for lower-income Americans.
While Washington continues to debate over the next step for Fannie and Freddie, the Collingwood Group reports that the two companies are making strides in improving their relationships in the mortgage industry. Sixty-seven percent of respondents in the firm's survey indicated that Freddie Mac has become more supportive and responsive to lenders' needs in the last year, while 63 percent said the same for Fannie Mae.
"The industry's perception of Fannie Mae and Freddie Mac's boost in performance over the last year is evidence of the fight for market share," the Collingwood Group said. "It's clear that the agencies are providing better service to customers in order to compete with each other and the private label market."
When asked about which factors most influence their decisions on which GSE to sell their loans to, nearly half of respondents cited price as the biggest point, with one anonymous respondent saying, "Amidst margin compression and rising expenses, we have to capture every basis point."
Twenty-four percent said the most important factor is which GSE offers better support for smaller lenders, while 22 percent were more concerned about rep and warrant relief and enforcement.