NAR praises takeover of Freddie Mac, Fannie Mae

WASHINGTON – The National Association of Realtors on Monday praised the federal government’s move to takeover the mortgage giants Fannie Mae and Freddie Mac, saying it will have positive short-term benefits.
In a statement on Monday, NAR President Richard F. Gaylord praised the actions, saying the plan will restore confidence in some markets, demonstrating the government’s commitment to the housing sector.
“I commend Treasury Secretary [Henry] Paulson and Federal Housing Finance Director [James B.] Lockhart for their bold actions to bring stability and continued liquidity to the nation’s mortgage market,” Gaylord said. “Fannie Mae and Freddie Mac have always played a vital role in the U.S. economy by making fair and affordable loans available for home buyers and owners. Their critical mission must not be interrupted and Sunday’s announcement goes a long way in making sure that does not happen.”
The takeover includes an up-to-80-percent stake in the companies for the federal government, led by the Federal Housing Finance Agency, NAR said.
The new ownership will drive a “positive cycle of investment as investors return to the market, further lowering rates and generating funds to lenders to expand their mortgage loan operations,” NAR said, citing research by Chief Economist Lawrence Yun. “That is expected to help speed up housing sales in markets across the country and help stabilize home prices.”
In announcing the takeover, Lockhart cited Fannie Mae and Freddie Mac’s $5.4 trillion of guaranteed mortgage-backed securities and debt outstanding and their inability to “provide needed stability to the market.”
“They also found themselves unable to meet their affordable housing mission,” he said in a statement on Sept. 7. “Rather than letting these conditions fester and worsen and put our markets in jeopardy, FHFA, after painstaking review, has decided to take action now.”
The National Association of Realtors is the nation’s largest trade association, with more than 1.3 million members in all aspects of residential and commercial real estate. Additional information is available at www.realtor.org.