The National Association of Realtors (NAR) has put forth a proposal to Congress asking that Fannie Mae and Freddie Mac be converted from government-sponsored enterprises (GSEs) into government-chartered, nonprofit secondary market entities.
‘The nonprofit authorities should take the best components from the current GSEs and import improvements from other secondary market models,’ said NAR in its proposal. ‘The current GSEs – Fannie Mae and Freddie Mac – are best positioned to become nonprofit government authorities because of their existing infrastructure. The transition from the existing GSEs to government nonprofit authorities will be as smooth and seamless as possible, ensuring a continual flow of capital to the secondary market, which will be critical during any period of transition.’
NAR adds that Fannie Mae and Freddie Mac's proposed nonprofit status would enable them to function as ‘self-sustaining organizations, without needing annual appropriations from Congress and without a profit motive.’ NAR believes that the GSE structure, with a private profit and public loss structure, was ‘inherently flawed.’
SOURCE: National Association of Realtors