AAF President Douglas Holtz-Eakin and Director of Financial Services Policy Meghan Milloy have written an op-ed for BankThink about reforming government-sponsored enterprises. Read an excerpt below:

The financial crisis that spurred the Great Recession hit nearly a decade ago. But to date, nothing has been done to meaningfully reform some of the main drivers of the crisis. That may change next year, as key members in both the House and Senate begin to discuss what to do with government-sponsored enterprises Fannie Mae and Freddie Mac. GSE reform proposals run the gamut from comprehensive reform of the entire housing finance system to restoring the original status of the GSEs. With this backdrop, what are the sensible options for the future of the GSEs?

The status quo is not an option. Since entering conservatorship in 2008, Fannie and Freddie have become de facto agencies of the federal government used to implement policies for mortgage relief and other objectives. (Indeed, the Congressional Budget Office has consolidated the financial activities of the GSEs into the federal budget.) Through this process, however, they have retained an enormous share of the housing finance market. Along with the Federal Housing Administration, the federal government now backs the origination of around 70 percent of all new mortgages.

Read the whole article here.