MBA Pres: ‘Recap and Release’ No Solution for GSEs

Stevens: Recap and release is “more like rewind and repeat.”

NEW YORK CITY—Mortgage Bankers Association president David H. Stevens on Monday rejected “recap and release” of Fannie Mae and Freddie Mac as a strategy for strengthening the secondary mortgage market. In prepared remarks at the opening general session of MBA’s National Secondary Market Conference and Expo in New York City, Stevens said MBA’s latest proposal for GSE reform “preserves what works in the current system, while enhancing the stability of the market, and protecting taxpayers and consumers.”

The “recap and release” of Fannie and Freddie would entail the government recapitalizing both entities and then quickly selling its stakes, Treasury Secretary Steven Mnuchin has testified that he doesn’t endorse that solution, although he has also made it clear that housing finance reform is a priority of the current administration.