NEW YORK — Industry leaders will get a chance today to put forth ideas on how to fix government-owned mortgage-finance giants Fannie Mae and Freddie Mac and the broader housing-finance system.
The Obama administration’s “Conference on the Future of Housing Finance,” to be moderated by Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan in Washington, D.C., is billed as a first step toward housing-finance reform.
It won’t have an immediate impact on holders of debt issued by Fannie and Freddie or for those who hold securities backed by mortgages that the two firms have guaranteed. But anything that relates to the broader discussion on reform of the government-sponsored enterprises can rattle investor confidence in the nearly $5 trillion market for mortgage-backed securities.
Even if the discussions remain broad-brush, investors will be eyeing the comments closely to gauge the direction that reform may take.
“Very large, core concepts have to be developed and broadly agreed upon before a blueprint can even be sketched (on GSE reform),” said Jim Vogel, mortgage strategist with FTN Financial. “After that point, the answers still won’t be obvious or easy.”
The conference is expected to cover topics including the impact of housing-finance reform on the financial markets and the private sector’s role in mortgage lending.
