Should the GSEs be privatized? On the latest Walker Webcast, Willy was joined by three of the industry’s leading voices to debate this hot-button issue:
-Jim Millstein, Co-Chairman, Guggenheim Securities
-Jim Parrott, Owner, Parrott Ryan Advisors
-Mark Zandi, Chief Economist, Moody’s Analytics
They covered the pros and cons, potential economic ripple effects, the impact on single vs. multifamily, and the real-world implications for investors, lenders, homebuyers, and taxpayers.
Key Points In The Webcast:
00:00 Introduction
02:07 Jim Millstein’s background
03:05 Jim Parrott’s background
05:20 Mark Zandi’s background
08:10 Are Fannie and Freddie meeting their initial mandate?
10:22 The risks of a prolonged conservatorship
12:32 The need to disrupt the status quo
13:26 Why sticking to the status quo is better
15:17 Fannie and Freddie conservatorship is too long
18:21 Tension between single and multifamily
20:41 How Fannie and Freddie are innovating
22:11 The necessity for a regulator to relieve tensions
24:04 Legislative vs. administrative route: the differences
28:47 Is 4% too high for risk-based capital?
35:08 Fannie and Freddie’s debt, MBS trade, and capital standards
39:54 The gap on single-family cost of borrowing
43:27 The weight of political risk
45:07 Defining our expectations of GSEs
49:26 A regulatory framework to address issues
51:06 Mortgage rates under Trump and lessons learned
56:00 The implications of an explicit guarantee
01:00:01 Predictions and future plans
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