The Obama Administration’s Housing Finance Reform Proposal: Opportunity for the Private Markets


Ending months of suspense, on February 11, 2011, the Department of the Treasury and the Department of Housing and Urban Development issued a report to Congress unveiling the Obama Administration’s plans for the two giant, government-sponsored secondary mortgage market entities (the “GSEs”), Fannie Mae and Freddie Mac, and for the future of the U.S. housing finance system generally (the “Proposal”).

Action to reform the housing and mortgage finance markets cannot come too soon. Despite a widespread political and public consensus that the GSEs, currently bankrupt wards of the State, have grown far too large in size and influence—a sentiment reinforced by a taxpayer bailout of at least $135 billion to date—the GSEs occupy an ever increasing share of the residential mortgage market. More than 90% of all new U.S. residential mortgage originations are purchased, guaranteed, or insured by the federal government, with the GSEs alone purchasing at least 70% of residential originations. Turning the fully laden GSE ship in mid-course is one of the most daunting tasks currently facing the government, but is considered by many to be an essential stepping stone to restoring a healthy housing market in the aftermath of the financial crisis.

Please see full bulletin below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Written by:


Morrison & Foerster LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.