In response to reports of increased income at mortgage finance agency Fannie Mae, U.S. Senator Bob Corker, R-Tenn., a member of the Senate Banking, Housing and Urban Affairs Committee, reiterated his call that these profits not become an excuse for inaction and expressed the need for long-term reform of our housing finance system.
"I'm glad Fannie Mae is showing an increase in income, but we have to remember that this is largely because we have crowded out private capital and made Fannie or Freddie the only viable execution option for new loans. So while I am hopeful that taxpayers can quickly be repaid for their investment in the GSEs, we must focus now on building a more sustainable 21st century system of housing finance that restores the private mortgage market after years of government dominance. I hope Congress will take the necessary steps to ensure housing finance reform can happen as soon as possible," said Corker.
Last month, Corker and Senators Mark Warner, D-Va., David Vitter, R-La., and Elizabeth Warren, D-Mass., also members of the banking committee, introduced the "Jumpstart GSE Reform Act" to prohibit any increase in the guarantee fee from offsetting other government spending or from allowing the sale of preferred shares without congressionally-mandated structural housing finance reform. The preferred shares were purchased by the U.S. Treasury Department during the 2008 financial crisis and are within Treasury's discretion to sell or otherwise dispose of. Any premature actions outside of structural reform will only build obstacles to a new housing finance system.