The
GSEs’
possible
release
and
the
timing
of
a
change
is
the
topic
of
much
speculation.
Recent
commentary
from

U.S.
Department
of
Commerce Secretary
Howard
Lutnick,
who
appeared
on
CNBC
in
September,
said
that
the
administration’s

plans
for
an
initial
public
offering (IPO) “could
well
be
this
year
…
sooner
than
people
think.”

Lutnick
said
that
only
a
small
portion
of
the
mortgage
giants,
which
have
been
under
federal conservatorship since
the
2008
financial
crisis,
would
be
sold
to
the
public.

Speaking
at

HousingWire’s
Mortgage
Banking
Summit,
Pete
Mills,
senior
vice
president
of
residential
policy
at
the


Mortgage
Bankers
Association,
and
Rob
Zimmer,
director
of
external
affairs
at
the


Community
Home
Lenders
of
America
said
the
conversation
in
Washington
has
shifted
from
whether
to
end
conservatorship
to
how
to
do
it
while
protecting
taxpayers
and
maintaining
market
stability.

“There’s
a
deal
track
and
a
market
stability
track,”
Mills
said.
“The
Treasury
is
highly
focused
on
ensuring
the
30-year
fixed-rate
mortgage
remains
available
in
all
market
conditions.”

Both
Zimmer
and
Mills
said
any
equity
sale
or
secondary
offering
of
GSE
stock
would
likely
require
Fannie
and
Freddie
to
exit
conservatorship
under
a
consent
order
—
a
structured
agreement
that
would
impose
benchmarks
and
restrictions
while
allowing
limited
private
investment.
“At
some
point,
if
they’re
serious
about
selling
equity,
they’ve
got
to
be
out
of
conservatorship,”
Zimmer
said.

Zimmer
added
that
maintaining
two
separate
GSEs
remains
critical
for
competition
and
access
to
the
secondary
mortgage
market,
particularly
for
community
lenders.
“At
CHLA,
we
don’t
like
monopolies
—
not
in
the
private
sector,
not
in
government,”
he
said.

Zimmer
and
Mills
also
stressed
that
updated
regulatory
frameworks
must
be
in
place
before
any
transition,
which
would
formalize
long-standing
principles
such
as
consistent
guarantee
fees,
bright-line
boundaries
between
the
primary
and
secondary
markets
and
operational
safeguards
to
ensure
equal
access
for
small
lenders.

“I
think
one
of
the
big
questions
for
the
new
regulator
is,
where
do
they
compete
and
where
do
they
align?
With
respect
to
GSEs,
you’d
like
to
see
alignment
on
things
like
servicing
standards
and
loss
mitigation
standards,
alignment
with
respect
to
the
Uniform
Mortgage-Backed
Security…I
think
if
they’re
closer
to
private
companies,
they’ll
compete
even
more
on
technology,
on
service,
on
how
they
do
risk-sharing
transactions….and
I
think
this
is
an
area
where
I
think
we
have
to
have
competition,
so
the
idea
of
merging
the
two
into
a
single
company
I
think
would
be
a
big
mistake,”
Mills
shared
with
the
audience.

Both
Mills
and
Zimmer
acknowledged
that
many
in
the
industry
today
have
never
operated
in
a
world
without
conservatorship.
“You’ve
gotten
used
to
a
fairly
competitive
market
between
large
and
small
lenders,”
Mills
said.
“Getting
this
right
is
really
important,
particularly
to
smaller
institutions.”

Zimmer
warned
against
allowing
the
GSEs
to
remain
under
direct
political
control,
saying
that
would
perpetuate
a
“seesaw
mortgage
policy”
that
shifts
every
four
years
with
changing
administrations.
“We
want
sound
housing
policy
that
transcends
politics,”
Zimmer
said.