Government Sponsored Enterprise (GSE) Resource Center


This center is the complete GSE resource for the real estate finance industry. This online center will house a current and comprehensive collection of resources on activity and changes relating to Fannie Mae and Freddie Mac.

GSE Loan Limit Issue Brief

September 7, 2010

On Tuesday, September 7, 2010, The Mortgage Bankers Association, (MBA) sent a letter to Alfred M. Pollard, General Counsel at the Federal Housing Finance Agency (FHFA), in response to FHFA’s proposal to establish a framework for the conservatorship and receivership for Fannie Mae, Freddie Mac and the Federal Home Loan Banks (FHLBs). In the letter, MBA’s Chairman-elect Michael D. Berman, CMB and President and CEO John A. Courson outline three primary concerns with the proposal and suggest solutions to help FHFA improve its final policy. Read the letter.

September 2, 2009

MBA's Council on Ensuring Mortgage Liquidity, a 23-member task force representing MBA's diverse membership base, Chaired by Michael Berman, CMB of CWCapital, proposed a model framework for the government's role in the secondary mortgage market. The Council presented its proposal in a paper, Recommendations for the Future Government Role in the Core Secondary Mortgage Market . Also, to help understanding of the recommendations, MBA prepared a Frequently Asked Questions document for the public's benefit.

June 3, 2009

MBA Vice Chairman Michael D. Berman, CMB testified before the House Subcommittee on Capital Markets, Insurance and Government Sponsored Entities at a hearing titled, "The Present Condition and Future Status of Fannie Mae and Freddie Mac." Click here for his testimony.

March 19, 2009:

MBA’s Council on Ensuring Mortgage Liquidity, Chaired by Michael Berman, CMB of CWCapital, developed the Principles for Ensuring Mortgage Liquidity, a complimentary document to the white paper Key Considerations for the Future of the Secondary Mortgage Market and the Government Sponsored Enterprises (GSEs). These principles are intended to help policy-makers proceed with discussions on restructuring Fannie Mae, Freddie Mac and the secondary mortgage market in general.

Principles on Ensuring Mortgage Liquidity

January 6, 2009: MBA Releases White Paper on Ensuring Mortgage Liquidity

MBA released a white paper titled Key Considerations for the Future of the Secondary Mortgage Market and the Government Sponsored Enterprises (GSEs). It was drawn in part from a November 19, 2008 Summit and developed further as input to the MBA's Council on Ensuring Mortgage Liquidity's deliberations.

Read Key Considerations for the Future of the Secondary Mortgage Market and the Government Sponsored Enterprises (GSEs)
December 30, 2008: The Federal Reserve Issued Additional Details About Its Program to Purchase Agency MBS

The Federal Reserve issued additional details about its program to purchase agency MBS. Private investment managers will act as the Fed’s agents in implementing the program. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers. The program does not include CMOs, REMICs, Trust IOs/Trust POs and other mortgage derivatives or cash equivalents. Eligible assets may be purchased or sold in specified pools, in “to be announced” (TBA) transactions, and in the dollar roll market.
Read the Federal Reserve's Frequently Asked Questions about the MBS Purchase Program.

September 11, 2008: FAQs on Treasury Senior Preffered Stock Purchase Agreement

Frequently Asked Questions: Treasury Senior Preferred Stock Purchase Agreement (prepared by Treasury)

Letter from MBA with Links to Resources:
The following is a letter issued to the industry from John A. Courson, Chief Operating Officer of the Mortgage Bankers Association (MBA).

Sunday, September 7, 2008

Today, the U.S. government took a historic step to stabilize the U.S. mortgage markets and financial system by placing Fannie Mae and Freddie Mac in conservatorship.

During a mid-morning press conference by government officials, they announced these key steps:
  • Conservatorship: Fannie Mae and Freddie Mac are placed into conservatorship immediately. (No change in status for the Federal Home Loan Banks.)
  • GSE Portfolios: To promote market stability, the GSEs will be allowed to increase their MBS portfolios through the end of 2009. However, starting in 2010 the portfolios will gradually be reduced at a rate of 10% per year through run-off, eventually stabilizing at a much lower size.
  • Treasury Preferred Stock Agreement: Treasury and the Federal Housing Finance Agency (FHFA) have established Preferred Stock Purchase Agreements to ensure that each company maintains positive net worth. These agreements are intended to provide security to GSE debt holders and MBS investors. In exchange, Treasury receives a senior preferred equity share and warrants to protect taxpayers - common and preferred shareholders will bear any potential losses ahead of the government's senior preferred shares.
  • Secured Lending Credit Facility: Treasury has established a new secured lending credit facility which will be available to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. This facility is intended to serve as an "ultimate liquidity backstop." This facility will expire on December 31, 2009.
  • Treasury Program to Buy GSE MBS: Later this month, Treasury will be initiating a temporary program to purchase Fannie Mae and Freddie Mac MBS. Such purchases will be made as appropriate. The program will expire on December 31, 2009.
Other highlights:

  • On Monday, the GSEs are expected to resume normal business operations.
  • The U.S. government assumes control over the Board and management.
  • Current Fannie Mae and Freddie Mac CEOs are being replaced, but will stay on through a transition period.
  • Herb Allison will assume CEO duties at Fannie Mae, and David Moffett will assume CEO duties at Freddie Mac.
  • There will be limited initial management actions - they will work with the current management team.
  • Dividends on preferred and common stock will be suspended.
  • All lobbying/political activity by the GSEs will cease.
Key Documents:

  • MBA Statement on the announcement;
  • Statement by Treasury Secretary Paulson on "Action to Protect Financial Markets and Taxpayers;"
  • Statement by FHFA Director Lockhart;
  • Treasury "Fact Sheet" on Senior Preferred Stock Purchase Agreement;
  • Treasury "Fact Sheet" on GSE Credit Facility;
  • Treasury "Fact Sheet" on GSE MBS Purchase Program;
  • Bio Sketches of new CEOs at Fannie Mae and Freddie Mac.
Next Steps:

MBA has been actively monitoring this situation throughout the weekend, working closely with the Administration, Congress, and the media. Today’s actions have significant implications for the future of the U. S. housing finance system. Clearly, there will be robust policy debates over the long-term structure and role of the GSEs. In anticipation of these discussions, MBA will be working with its members to develop policy options that ensure a strong secondary mortgage that provides a stable supply of affordable mortgage credit.

Yours Very Truly,

John A. Courson
Chief Operating Officer
Mortgage Bankers Association