‘Foong on Finance’: Capitol Hill Opinion Coalescing around MBA’s GSE Framework?

The Mortgage Bankers Association’s (MBA) proposed plan for the future of the GSEs may be well received by the Obama Administration.

MBA has met with stakeholders on Capitol Hill and discussed its proposal for the future of the secondary market, which it first put forward in September 2009.

MBA’s recommendations call for the creation of a number of private entities, “MCGEs,” that would replace Fannie and Freddie. These entities would provide loan-level guarantees for the mortgages. The government would continue to provide guarantees, at the securities level. There would be payment going into an insurance fund to protect taxpayers.

There is a “coalescing of opinions” around MBA’s “general outline,” reports Michael Berman, MBA chairman, and president and CEO of CWCapital. Speaking in a teleconference with reporters last week, Berman said that “it is safe to say the proposal has been well-received.”