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HousingWire Daily
Jim Lockhart on the cooperation needed to get the GSEs out of conservatorship
Feb 18, 2025
In this engaging discussion with Jim Lockhart, a seasoned expert in housing finance, he dives into the complexities of Fannie Mae and Freddie Mac's conservatorship. Lockhart emphasizes the necessity of a strategic approach to transition these entities while navigating high mortgage rates and housing affordability. He reflects on the historical impact of conservatorship and the surprising legislative inaction since. The conversation also highlights crucial issues in government debt management and the need for bipartisan cooperation to ensure a stable mortgage market.
32:18
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Quick takeaways
- Jim Lockhart argues for timely action to remove Fannie Mae and Freddie Mac from conservatorship to ensure stability in the housing finance system.
- He advocates for a bipartisan approach to address the national debt and improve government efficiency, emphasizing reforms in entitlement programs.
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The Case for Exiting Conservatorship
It is believed that now is the appropriate time to consider taking Fannie Mae and Freddie Mac out of conservatorship, despite the current challenges in the housing market, including high mortgage rates and affordability issues. Jim Lockhart emphasizes that it's been over 16 years since these entities were placed under conservatorship, and delaying any action may prolong their status without addressing necessary reforms. He argues that the existing situation fosters a heavily government-backed mortgage market, with nearly 70% of mortgages supported by the government, which may not be sustainable or beneficial in the long run. Lockhart advocates starting the process of exiting conservatorship while ensuring the protection of the existing $7 trillion in outstanding mortgages to maintain stability in the housing finance system.
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Discover
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