Watt Sounds Warning Bell on Fannie, Freddie #realestate #finances

Source:  The Hill

Mel Watt, the director of the Federal Housing Finance Agency, is warning politicians that the nation should not delay an overhaul of the housing finance system.  As the top housing regulator, Watt stated that Fannie Mae and Freddie Mac (GSEs) were facing increasing risks after 8 years of functioning under a government conservatorship.  Watt warned that since this arrangement requires the GSEs to remit nearly all profits back to the Treasury, it makes it nearly impossible for the GSEs to build up a capital buffer to guard against future losses.  Under the terms of the conservatorship, the two will have no buffer beginning in 2018.

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