WASHINGTON, DC-Washington is still talking the talk about reforming the GSEs: Federal Housing Finance Agency Acting Director Edward J. DeMarco has released the agency's 2013 Conservatorship Scorecard for Fannie Mae and Freddie Mac and its goals for 2013 make clear it still intends to streamline and shrink the GSE's certain operations--including multifamily finance.
Chief among its recommendations is the development of a new securitization infrastructure. As DeMarco described this new infrastructure in a speech, the agency will establish a new business entity between Fannie Mae and Freddie Mac. "Our objective, as we stated last year, is for the platform to be able to function like a market utility, as opposed to rebuilding the proprietary infrastructures of Fannie Mae and Freddie Mac," he said.
The new venture will be headed by a CEO and Chairman of the Board that are independent from Fannie Mae and Freddie Mac. It will also be physically separate from Fannie Mae and Freddie Mac. In addition, DeMarco said, "we plan on instituting a formal structure to allow for input from industry participants.
Of equal, if not greater, importance to the commercial real estate industry, the FHFA will also scale back its support of multifamily finance, he announced and has set a 10% reduction target in business volume from 2012 levels.
"We expect that this reduction will be achieved through some combination of increased pricing, more limited product offerings, and tighter overall underwriting standards."
Stay tuned for more GlobeSt.com coverage on this issue.
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