Exterior of MBA headquarters MBA headquarters in Washington, DC. (Photo: Vornado Realty Trust)

WASHINGTON, DC—Calling GSE reform “the last piece of unfinished business from the 2008 financial crisis,” the Mortgage Bankers Association on Thursday released a white paper outlining its plan for doing so. MBA’s proposal would bring much higher levels of private capital into the secondary mortgage system, while preserving what works in the current system: namely, 30-year fixed rate single-family mortgages, the TBA market and long-term multifamily financing options.

The association’s view of GSE reform would replace the implied government guarantee of Fannie Mae and Freddie Mac with an explicit guarantee at the MBS level only, supported by a newly instituted Mortgage Insurance Fund with appropriately priced premiums. It would also bring an element of competition into the picture with multiple guarantors that would compete on operations and systems development, customer service, product parameters and innovation, and pricing and execution.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.

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