Moody's Talks - Inside Economics Cliff's Notes on Housing Finance
May 28, 2025
Clifford Rossi, a distinguished Professor at the University of Maryland and former Chief Risk Officer at Countrywide, shares his insights on the future of housing finance. He discusses the potential privatization of Fannie Mae and Freddie Mac, highlighting the complexities in the current mortgage market. Rossi also presents his innovative proposal for revamping the homeowners insurance market amid natural disaster risks, emphasizing the need for creative solutions to support homeowners effectively.
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Cliff Rossi's Career Journey
- Cliff Rossi shared his extensive career path from Thrift Regulatory Agency to Fannie Mae and Freddie Mac, culminating in academia.
- He described his transition from industry to an academic role at University of Maryland after the 2008 crisis burnout.
Homeowner Insurance Crisis Insight
- Homeowners insurance premiums are surging, sometimes exceeding mortgage principal and interest nationwide.
- Catastrophic risks in disaster-prone areas are driving insurer costs beyond sustainable levels.
Fixing Homeowner Insurance Market
- Create a new government-sponsored enterprise to handle natural hazard insurance risks, separating flood and catastrophe coverage.
- Use risk transfer securities to spread losses to private investors, stabilizing the homeowner insurance market.