signaled it wasprepared to the support the two agencies with what is effectively ablank check.

|

The government took control over the GSEs in 2008, when itbecame clear the agencies were heading for calamity. Littlefinancial headway has been made since then. Indeed, the requestsfor additional aid have steadily increased; Fannie Mae alone istopping $60 billion in requests for emergency assistance. Theagency's last requestfor $15 billion, in fact, pushed some in the real estateindustry--which relies on the GSEs for multifamily finance--to takethe position that enough aid has been rendered.

|

There have been other proposals to rejigger the GSE model overthe past 12 months, put forth by such industry groups as theMortgage Bankers Assoc. Few of these, though, suggest outrightdismantling of the agencies. More worrisome, at least to theirproponents, is the fact that Frank has apparently thrown hissupport behind this movement.

|

For the moment, many are taking comfort in Frank's steadfastcommitment to affordable housing, which has been part of the GSEs'mission.

|

"Given the Congressman's long history of supporting federalefforts to make homeownership and rental housing affordable formore Americans, I don't read his remarks as abandoning thatcommitment, merely as seeking a better way to implement and furtherthat commitment," says LaFonte Nesbitt, partner and co-chair ofHolland & Knight's Affordable Housing Team. "Like much inWashington and economic policy overall, the keys will be in thedetails," he tells GlobeSt.com.

|

So far, details are scarce about Frank's intentions, he says.But "given the huge presence of Fannie and Freddie in both thesingle-family and multifamily financing markets--and especiallyover the last six to 12 months--it is hard to imagine that thosefinancing markets can continue without some kind of federallybacked mortgage finance institution."

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.