Fannie & Freddie will be the next president’s problemby Tim Manni
If you follow this blog regularly, or even Google News for that matter, you know the latest big news in the mortgage world: the Treasury has laid out three strategies to reform our country’s mortgage system. Sure, last Friday’s presentation of the plans made a big splash, but the truth is, concrete Fannie, Freddie reform is a long way off.
Sure, debate will be waged on Capitol Hill where both political parties will fight hard to preserve or eliminate different aspects of our mortgage system, but I’m banking on the final plan of action to be made under the next president’s watch.
While I certainly wouldn’t blame the president for intentionally punting the reform down the road — there’s a lot of room for failure and criticism here — I honestly believe there’s just too much to talk about before election season.
Even the Dodd-Frank legislation, which is currently underway, is receiving a lot of static from Republican lawmakers seeking to delay its implementation. According to Reuters, there’s little chance of changing Dodd-Frank’s rules, but there is a shot at disturbing it along the way:
“Republicans will argue in favor of extending implementation of (Dodd-Frank) … but these are timing issues and won’t affect the substance of the rules,” said Brian Gardner, analyst at investment firm Keefe Bruyette & Woods.
Republicans on the banking panel are putting additional pressure on regulators, such as the Federal Reserve and the Treasury over Dodd-Frank, sending letters raising questions about whether they are following federal rule-making procedures.
Dodd-Frank will certainly help to inform the Fannie, Freddie discussion and will influence the timing of the GSE reform to some degree, but that said, with Dodd-Frank underway, I’m not anticipating the sweeping financial reform to delay the overall goal of deciding what happens to Fannie and Freddie.
Still, unless President Obama wins reelection, I’m not expecting that he will be the commander and chief who will preside over the final plan of action.