If you’re hoping to see the beleaguered Fannie Mae and Freddie Mac adequately recapitalized, you’re going to have to wait another two decades or so. But Mary Miller, the Department of the Treasury’s undersecretary for domestic finance, is hoping to find another way. As she put it at Friday’s National Housing Conference Annual Policy Symposium in Washington, D.C., the current system of taxpayer-funded GSEs simply doesn’t work.Miller painted a rather grim picture of the GSEs, saying the entities have shut out far too many otherwise-credit-worthy borrowers by making lenders reluctant to lend and by putting the risk squarely on taxpayers’ shoulders. Miller’s portrait of the American housing market design shows a badly flawed system in which the average taxpayer will get the bill if the market were to crash again. This, she said, would happen despite the federal government’s significant presence in the housing market, which includes ongoing funding of the GSEs. But any perceived health in the current system is a false security, Miller said. The profitability of the GSEs in the past two years has, after all, “been driven by income from their retained portfolios, which benefit from being funded through Treasury capital … at low rates the private market cannot obtain,” she said. These portfolios remain significant sources of income for entities such as Fannie and Freddie. However, the GSEs are required to shrink their portfolios by 15 percent per year, meaning that the GSEs will not be able to replicate the levels of revenue they’ve achieved over the past two years. “In short, adequately recapitalizing the GSEs would take longer than many realize or would admit,” she said.To make “a fairer and more sustainable housing finance system” will take a lot more than simply refilling the coffers of Fannie and Freddie—which, she said, would take at least 20 years to do. In the meantime, unless the design of the system is changed, there is little more to go on than crossed fingers that nothing goes wrong until the 2030s.The cornerstone of this new design should begin with a return of private capital to the center of the system, Miller said. President Barack Obama has embraced this same idea since his first term, saying that the GSE’s current model simply allows private shareholders and executives to benefit at the expense of taxpayer losses. The new housing finance system must also provide borrowers widespread access to safe, responsible products, including 30-year fixed-rate mortgages, she said.Whatever happens will take a lot of work and a lot of patience. “There is no quick-fix solution around this,” Miller said. “Only legislation can protect taxpayers by responsibly winding down the GSEs and replacing them with a system where a government guarantee is transparent and explicitly priced.” Previous: May Housing Scorecard Shows Progress in Equity and Home Sales Next: DS News Webcast: Monday 6/16/2014 Department of the Treasury Fannie Mae Freddie Mac Mary Miller Recapitalization 2014-06-13 Scott Morgan Demand Propels Home Prices Upward 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Demand Propels Home Prices Upward 2 days ago June 13, 2014 941 Views About Author: Scott Morgan Share Save Servicers Navigate the Post-Pandemic World 2 days ago Sign up for DS News Daily Print This Post Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago in Daily Dose, Featured, Government, Headlines, News The Best Markets For Residential Property Investors 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Subscribe Data Provider Black Knight to Acquire Top of Mind 2 days ago The Best Markets For Residential Property Investors 2 days ago Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He’s been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing. Tagged with: Department of the Treasury Fannie Mae Freddie Mac Mary Miller Recapitalization Miller: Recapitalized Fannie, Freddie a (Bad) 20-year Option Related Articles Home / Daily Dose / Miller: Recapitalized Fannie, Freddie a (Bad) 20-year Option
The Tequesta police department is reporting that a 35-year-old man was shot and killed Sunday after he attempted to help a woman who was being attacked by her boyfriend.According to the report, 28-year-old Bryan Bacallao and his girlfriend were arguing on a residential street when Bacallao grabbed his girlfriend by the neck and tried to force her to the ground. The victim, Justin Todd saw the incident and attempted to intervene. That’s when Bacallao pulled out a gun and shot Todd once in the chest.Bacallao later told police that he feared for his life because Todd was much bigger than him. Once Todd began walking towards him, Bacallao told him to step away and then fired his gun.Bacallao has since been arrested and charged with murder. His first court appearance was scheduled for Monday morning where a judge denied him bond.