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FANNIE MAE
CEO WARNS
AGAINST
HOUSING
FINANCE
REFORM
Speaking as a guest presenter at the Rotary
Club of Atlanta, Fannie Mae President and
CEO, Timothy Mayopoulos, warned against
any type of reform where housing finance is
concerned, telling the audience that "the (cur-
rent) system works."
Mayopoulos said that while the reputation
of Fannie Mae and its sibling GSE, Freddie
Mac, were hurt by the $188 billion bailout they
required in September 2008 when the govern-
ment took them under conservatorship, Fannie
Mae ended up providing stability for the hous-
ing market. As of December 2014, Fannie Mae
has paid back about $134.5 billion in dividends
to the U.S. Department of Treasury.
Regarding the possibility of housing
finance reform, Mayopoulos said it was hard
to predict what the next session of Congress
would bring. Many have called for ending the
Federal Housing Finance Agency's (FHFA)
conservatorship of Fannie Mae and Freddie
Mac; still others have called for, and even
proposed legislature for, eliminating the two
GSEs altogether.
"Fannie Mae was able to repay the taxpayer
within five years. It is sustainable," Mayopou-
los said. "e system works. Any new system
being discussed would involve a lot of change
and would have a huge amount of risk. It's
important for policymakers to consider how
much change you want to introduce after the
crisis when things have stabilized."
Egbert Perry, a rotarian who is the founder
of the Integral Group and chairman of Fannie
Mae, said the GSE has provided $4.3 trillion in
liquidity for the mortgage market since 2009
and that its current Book of Business totals $3.1
trillion, most of which is in secondary market
mortgage loans.
Mayopoulos, when asked by Perry how
Fannie Mae would operate without the capital
that currently totals $2.4 billion and is sched-
uled to be reduced by $600 million per year
until it has reached zero, says that the decision
on how the GSE would operate without capital
was made when the agency was placed in
conservatorship.
