Saturday, January 3, 2015

No Sense in Keeping the GSEs Undercapitalized

No Sense in Keeping the GSEs Undercapitalized



Treasury can - and should - take immediate corrective action to cure the undercapitalization of the GSEs. There is neither a need nor a rational reason to wait on Congress to act, particularly since GSE reform legislation is far from certain.
"Mortgage bankers have now joined the Civil Rights groups and community banks in asking for this important, common-sense change," McGrath said.
The alternative, and the less preferable, approach is to lower the GSE guaranty fees. This would at least remove an unnecessary tax locking so many homebuyers out of the market.

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