HousingWire Daily Logan Mohtashami on the biggest risk of releasing the GSEs from conservatorship
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May 28, 2025 
Logan Mohtashami, a leading housing market analyst, joins to discuss critical concerns surrounding the release of Government-Sponsored Enterprises from conservatorship. He delves into the implications of rising mortgage rates and how they could affect housing demand. The conversation highlights the challenges posed by climate change in disaster-prone areas and the need for data-driven solutions in appraisals. Mohtashami also offers insights on how political factors intertwine with mortgage trends, especially in light of upcoming elections.
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Risks of GSE Release
- Removing Freddie and Fannie from conservatorship risks widening mortgage spreads, especially if bond yields rise.
- Elevated mortgage rates could make the transition difficult and worsen housing affordability.
Climate Risk Pricing Impact
- Without government backing, mortgage pricing will rise notably in climate risk states like Florida and Texas.
- GSEs currently cushion climate-related risks by keeping mortgage pricing stable in vulnerable areas.
Financial Motives Behind GSE Reform
- The biggest financial asset for the U.S. government is student loan debt, which brings in significant revenue.
- Reforming GSEs could be motivated by hedge funds seeking profits rather than fiscal necessity.