Fannie and Freddie aren't going private anytime soon, Mark Calabria says(
HousingWire by James Kleimann). The former FHFA director said that Donald Trump will try to privatize the GSEs if he's reelected, but the move won't happen in 2025.
As for the mechanics of removing the government-sponsored enterprises (GSEs) from conservatorship, Calabria said it would take several years to pull off. He noted there are detailed plans in place from when he was last in charge of the FHFA and Steven Mnuchin was the secretary of the U.S. Department of the Treasury.
"A new Treasury secretary is also probably going to have to go through six to nine months of doing the rounds, and talking to people and hearing the enthusiasm, before they figure out that Congress isn't going to do anything," Calabria said in remarks given Monday at a Community Home Lenders of America (CHLA) event in Washington, D.C.
"And so, if you start from the premise of 'Congress is unlikely to do anything,' then what do you have to do? There's nothing about the conservatorship that changes the implied guarantee. Despite what maybe some people in capital markets may believe, there's no guarantee in conservatorship; there's no guarantee out of conservatorship."
The chances of the agencies going private in 2025 is "zero," Calabria said.
"But by [2027] I would say there's maybe 70% chance. ... Almost every decision you think you have to make, we scoped out. All those millions of dollars with my go ahead, low-key actually produced documents. So, there are plans; there are options. You can get them out. It's all feasible, doable."
Direct's Comment:It is a bad idea to privatize Fannie Mae and Freddie Mac. These entities represent one of the few things that government can do well; and does do well. These entities - as government enterprises - have helped our country avert 2 total disasters. The first disaster would have occurred in 2008. And the next disaster avoided was in 2020. If these entities were private, there would have been a completely different result. It could have been catastrophic!
Some remember the actions of Mark Calibria just a few short years ago. For example, he single-handedly destroyed the value of MSR servicing. He changed the payout for loans against lenders - with no prior warning. This man created more havoc than anyone I can remember - and none of it was good for our housing industry. So, it comes as no surprise that he had a detailed plan of how to privatize these entities. Disregarding the fact that privatizing would be disastrous for our country in times of economic uncertainty.
Mark Calibira - your time has passed. Thank goodness. Let's pray that nobody else just like him is appointed to the future.
Prophetic Counsel.(
Doctrine and Covenants 21:5). For his word ye shall receive, as if from mine own mouth, in all patience and faith.
Comment:Some revelations have been given for unique circumstances, such as Noah's building of the ark or the necessity for prophets like Moses, Lehi, and Brigham to lead their followers in arduous travel. God's long-established pattern of teaching His children through prophets assures us that He will bless each prophet and that He will bless those who heed prophetic counsel.
A desire to follow the prophet requires much effort because the natural man knows very little of God and even less of His prophet.
(Daily Joy, Russell M. Nelson, p. 285).
