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Memorandum to Mobilize Plans for Reform 

In a memorandum on Wednesday, the Trump Administration formalized GSE reform, with the President calling on Congress, the Department of Housing and Urban Development and the Treasury Department to develop and execute plans that would:

  • Bring Fannie Mae and Freddie Mac out of conservatorship
  • Build out competition in the finance market
  • Maintain the 30-year fixed mortgage
  • Protect taxpayers

The announcement came concurrent with Senate Banking Committee hearings on reform this week, which included testimony from Vince Malta, National Association of REALTORS® president-elect, and other industry and related stakeholders.

In February, Sen. Mike Crapo (R-Idaho), chairman of the Senate Banking Committee, outlined a proposal for reforms, giving the issue legs in Washington. Crapo’s plan includes privatization—backed by Ginnie Mae, which constitutes a government guarantee—and continuing the 30-year fixed mortgage, which has been advocated for by the housing industry.

“Bipartisan Congressional action on GSE reform is the only way to secure an explicit government guarantee, which is a critical component of a robust U.S. housing market,” said Malta at the hearings this week. “To this end, REALTORS® welcome and applaud Chairman Crapo’s proactive efforts to initiate these conversations on Capitol Hill.”

In February, NAR announced it had developed a framework for reform, during a forum hosted by the organization. More than 400 were in attendance at the gathering, bringing the issue into the national spotlight.

“Like NAR’s vision, the Chairman’s outline emphasizes an explicit government guarantee, regulatory flexibility and strong, reasonable regulatory authority, demonstrating a genuine commitment to ensuring a future housing finance system that is both safe and vibrant,” Malta said. “These elements should be the backbone of any comprehensive housing finance reform.”

“This week’s hearings in the Senate Banking Committee showed multiple points of broad industry consensus on GSE reform,” said Shannon McGahn, NAR senior vice president of Government Affairs, in a supporting statement. “Specifically, many participants agreed that our housing finance system would benefit from a utility model that can serve the national market and promote stability in the housing market, particularly during times of economic distress.

“We’re confident that these key principles will be the basis for reforms on Capitol Hill in the coming months,” McGahn said.

According to the Trump Administration, the GSEs are “overdue” for reform, and without it, both Americans and federal housing programs are at risk. Fannie Mae and Freddie Mac have been in conservatorship since 2008.

Across the housing industry, the memorandum was met with praise. In a statement, John Smaby, NAR president, said: 

“REALTORS® are encouraged to see conversations surrounding GSE reform intensifying in Washington, particularly with the White House today directing the U.S. Treasury to outline plans for how Fannie Mae and Freddie Mac can be removed from conservatorship. While NAR believes the GSEs must be transitioned out of conservatorship, this must be done in a responsible manner that will protect taxpayers and retain the Enterprises’ public mission, and these actions must be driven by Congress. This is the only way to secure an explicit government guarantee, a public mission and the 30-year fixed rate mortgage, critical components of a robust U.S. housing market. That point will remain NAR’s primary focus as we continue GSE reform conversations with the Senate, House and the Administration.”

Bob Broeksmit, CEO and president of the Mortgage Bankers Association, who also testified this week, stated:

“MBA applauds President Trump and the Administration for fashioning a memorandum designed to promote competition in the real estate finance markets and protect taxpayers. We are heartened the memorandum recognizes the GSEs should be released from conservatorship only after specified reforms, and that it insists on other core principles such as preserving the 30-year fixed-rate mortgage and leveling the playing field for lenders of all sizes.”

The National Association of Home Builders Chairman Greg Ugalde, another participant in testimonies this week, stated: 

“We applaud the President for taking an active leadership role to revamp the nation’s housing finance system. NAHB is especially pleased that his memorandum specifically cites the importance of preserving the 30-year fixed-rate mortgage, which has enabled millions of American families to build wealth and financial security through homeownership. The right reforms are critical to maintain a healthy housing market and ensure that single-family and multifamily housing credit for sale and rental properties remains readily available.” 

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at