MBA's Quinn: OFHEO Move to Reduce GSE Capital Requirements is a Crucial Step to Jumpstart the Mortgage Market

Kieran P. Quinn, CMB, Chairman of the Mortgage Bankers Association (MBA) hailed today's agreement between the Office of Federal Housing Enterprise Oversight (OFHEO) and Fannie Mae and Freddie Mac (the GSEs) allowing the GSEs to use a significant portion of their capital surplus for purchasing mortgages and mortgage-backed securities (MBS). OFHEO estimates this will result in an immediate injection of $200 billion into the secondary mortgage market.

Quinn issued the following statement:

'Today's action is a crucial step in the effort to jumpstart the stalled mortgage market. This immediate injection of liquidity reestablishes the pipeline of funds flowing from secondary market mortgage purchasers to primary market lenders. This, in turn, will enhance lenders' ability to offer financing to a wide variety of borrowers, including those looking to refinance into a more stable and affordable loan. This should help keep some at-risk borrowers in their homes which will help stabilize the real estate market.

'MBA is very encouraged to see that OFHEO and the GSEs have renewed their commitment to GSE oversight reform. This has long been one of MBA's top legislative priorities and we are eager to work with OFHEO, the GSEs, Congress and the Administration to bring it to fruition this year.'