The Mortgage Bankers Association (MBA) has reacted harshly to an announcement made yesterday by Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency.  In a speech before an economic conference DeMarco said that FHFA, in its role as conservator of Freddie Mac and Fannie Mae (the GSEs) would be setting up an independent business entity to manage a new securitization platform for the secondary market. 

MBA's President and CEO David H. Stevens issued a formal statement this afternoon which said the concept of a single securitization platform further highlighted the need for a comprehensive discussion among policymakers and stakeholders about the future of the GSEs and the potential role of the government in housing markets.

Stevens said, "Piecemeal proposals without a broader framework create uncertainty and raise more questions than they answer.  This latest proposal of a single platform and a new entity (owned and funded by Fannie Mae and Freddie Mac) to manage it, is just one piece of a much larger puzzle that impacts borrowers, lenders and the market as a whole.  What is the ultimate objective?  How would the creation of this new entity, owned by Fannie Mae and Freddie Mac, impact their potential restructuring and how would it affect other market players like FHA and private investors?"

He complained that, in the four years since Freddie Mac and Fannie Mae were placed into conservatorship there have been countless proposals and ideas put forth by MBA and others on ways to restructure the secondary market and that it is now time for action.  "Proposals of this magnitude, he said, "need a transparent process to engage with stakeholders, articulate objectives and alternatives, and demonstrate that stakeholder concerns have been evaluated and addressed."  It is time for Congress and regulators to involve other stakeholders and "move the ball forward.  Until this happens, the uncertainty in the markets will persist, and a full recovery of the housing market will remain elusive."