GSE's To Congress: It's Your Bubble
Amidst the noise about a new regulator, the discussion in congress turned to the most important question. "William Batz, COO of the Federal Home Loan Bank of Pittsburgh, said any action Congress takes that could weaken the 'implicit guarantee' that Washington would bail the government-sponsored enterprises out in a crisis could ultimately raise housing costs."
The easy money provided by the lenders hasn't raised housing costs? Anyway, without that guarantee, the GSE's doors would close.
"Thomas Lund, interim head of Fannie Mae's single-family mortgage business, said the portfolio is critical to Fannie Mae's ability to ensure liquidity in the secondary market. He said people right now are 'fooled' by the high liquidity of the mortgage market, driven by low borrowing rates and strong buyer demand."
"That will dry up. "We just need to make sure that as we go through this legislative process, people realize that this is not the environment that we're always in."
"Our portfolios and our guarantee business are really there to bring funds from other parts of the world into our housing industry and make sure that we keep this industry liquid in good times and bad."