The IMBs urged regulators to keep Fannie and Freddie separate under a utility model, cautioning that a merger could create a monopoly and reduce market accountability.
“Fannie and Freddie should not be combined into a market monopoly. Further, the GSEs should operate under a Utility Model with authority to cap excessive G Fees or bar unduly risky loans,” the letter said.
The letter also called for the preservation of mission-based mortgage products, including loans for condominiums, manufactured homes, and rural properties, warning that “stockholder earnings pressures after a GSE exit from conservatorship could create incentives for Fannie and Freddie to abandon critical lower volume mortgage loan products.”
Finally, the IMBs advocated for the GSEs to purchase mortgage-backed securities to help lower mortgage rates, echoing recent calls from the administration to address affordability challenges.
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