Joint Letter to Treasury on GSE Conservatorships

The Honorable Steven T. Mnuchin
Secretary
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220

Dear Secretary Mnuchin: 

The undersigned associations, which represent mortgage lenders, servicers, investors, home builders, and REALTORS®, as well as other important market participants, write to share our views on the conservatorships of Fannie Mae and Freddie Mac (the government-sponsored enterprises, or GSEs). We believe there are tangible, near-term steps that the U.S. Treasury Department (Treasury) can take, in coordination with the Federal Housing Finance Agency (FHFA), to promote critical reforms of the GSEs and bolster their safety and soundness. We are concerned, however, that other potential actions to release the GSEs from conservatorship without the necessary safeguards would undermine investor confidence, create volatility in the single-family and multifamily mortgage markets, and impede access to credit for consumers. 

A stable housing finance system is key to defending housing affordability and facilitating homeownership and rental housing opportunities. In particular, protecting access to credit is necessary for a healthy demand side of the market, and the inventory deficit cannot be improved without the long-term stability necessary to develop land and build homes.

Our associations and the members we serve have worked over the past twelve years to develop reform plans and advance efforts – both legislative and administrative – that would correct structural flaws in the GSEs’ pre-conservatorship business models and allow them to transition safely out of conservatorship. We have not supported, nor do we currently support, an “endless” conservatorship. Our position is quite the opposite – we wish to see the GSEs reformed and operating outside of government control. We therefore favor actions that move the GSEs closer to the preferred end state in a timely manner that does not disrupt the housing finance market and inflict broader economic harm.

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