Congress continues to debate reforms to the GSEs and the conservatorship model, though the near-term chance of reform remains low. This would severely restrict, if not curtail, home sales and any supporting ancillary home sales services.įannie and Freddie continue to support around 70% of the mortgage market and remain a vital component of the housing finance system. Without the government’s support of the GSEs and FHA-insured loans, which currently constitutes a large portion of the market space, there would be almost no capital available for mortgage lending. During the housing finance sector's collapse, private capital withdrew from having a significant, competing role with the GSEs. Fannie Mae and Freddie Mac (the government-sponsored enterprises or GSEs) play a key role in the secondary mortgage market, which is crucial in providing capital for mortgage lending.
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