Investors continue to pitch the takeover of much of the Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac, with Fairholme Capital Management Funds submitting a proposal on Nov. 14 to purchase the GSEs on behalf of private investors in a $52 billion deal. The next day, reports surfaced that private equity hedge fund Pers
However, on Nov. 20, the White House said that simply restructuring the GSEs would be a “nonstarter” because it wouldn’t address their central role in mortgage finance. Gene Sperling, director of the National Economic Council was quoted in the related Wall Street Journal article saying, “I want to make clear our administration believes the risks are simply too great that this would re-create the problems of the past.”
This all comes at a time when the Senate Banking Committee is working on a draft bill to gradually wind down the GSEs. NMHC/NAA has been engaged with the Committee and the sponsors of legislation by Senators Bob Corker (R-TN) and John Warner (D-VA). This has included looking at private investment, as well as preserving the multifamily mortgage activities that have performed so well for more than two decades. We have submitted details on how a related transition and system could work.