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Realtors® Release New Vision for Fannie Mae, Freddie Mac Reform
press release, National Association of Realtors

With over 400 people on hand for the National Association of Realtors®’ Housing Finance Reform Policy Forum, NAR today unveiled a new vision for reforming the GSEs. As featured speakers for the panel titled “NAR’s vision: A plan for secondary finance shaped in the aftermath of adversity for longevity,” co-authors Dr. Susan Wachter, Professor of Real Estate and Finance at the University of Pennsylvania, and Dr. Richard Cooperstein, head of Risk Management at Andrew Davison and Company, presented NAR’s comprehensive GSE proposal to the public for the first time at the Grand Hyatt in Washington.

NAR’s research is intended to provide a pragmatic solution to the challenges facing the housing finance system by prioritizing and protecting a liquid mortgage market for Middle America and underserved borrowers alike. Unlike a recapitalization and release plan, NAR’s vision offers policymakers a responsible framework that protects taxpayers, minimizes costs to consumers and promotes housing accessibility and affordability.

“This vision is the result of years of research and collaboration between NAR, our members, our friends in the industry and countless policymakers who have been influential in this arena,” said NAR President John Smaby. “Our hope is that this research will help provide Congressional leaders and administration officials with a credible, deliberate framework as they work to secure reforms that will benefit taxpayers, consumers and the American economy. Ultimately, ensuring the GSEs continue providing liquidity and stability in the mortgage market remains NAR’s priority during these discussions.”

The GSEs of 2019 are not the GSEs of 2005. Today, Fannie Mae and Freddie Mac have a stronger regulator in the FHFA and are subject to additional Congressional oversight. They are restricted in the products they can purchase, the size of their retained portfolios and their ability to lobby. In addition, they increased and will continue to expand the volume of mortgage credit risk shared with the private sector. These changes have begun to decrease risks tied to the GSEs, injecting private capital and market disciplines to guarantee pricing and mortgage rates for consumers.

Identifying where competition works and where it does not, the research builds on a structure designed to maximize private investment. “This vision of a reformed secondary market for housing finance first recognizes the need for the GSEs to carry out a public mission, the same need that led to their initial creation,” the paper reads. “Second, this proposal builds upon the transformed enterprises under conservatorship, bringing in appropriate levels of private capital and a strong regulator to protect taxpayers. Third, this proposal codifies a structure that is effective, resilient and fair, balancing the tension of private operating companies with the public mission. It builds on what works today and creates a system that will serve the nation for decades to come.”

During the panel discussion, co-author Richard Cooperstein noted, “By addressing the imperfections in the market for housing finance, we can increase competition of private capital to invest in mortgages, keep markets more stable in times of stress and stay mission-focused.”

An executive summary and full copy of NAR’s vision on housing finance reform can be found on

Co-author Susan Wachter added, “GSE reform is the critical, unfinished business of the Great Recession; we believe the shareholder-owned regulated utility we propose will protect taxpayers and ensure the fulfillment of the mission to serve the nation for the future.”

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