Panelists Discuss Future of Mortgage Market

Panelists Discuss Future of Mortgage Market

09/13/2013 BY: HUGH MOORE

When Ron D’Vari and Thomas Heinemann discussed the possible winding down of Government Supported Entities (GSEs) Fannie Mae and Freddie Mac, one thing both agreed on was that possible reform of government’s role in the mortgage market needs to be preceded by sweeping changes in how loans are provided and capitalized.

“GSE reform is badly needed,” said D’Vari , Co-Founder and CEO of NewOak Capital. “But other issues have to come ahead of this. Provided the right transition and the right preparation, there is capital in the market.”

Heinemann, a senior legislative advisor in the Department of Housing and Urban Development, said that coming regulations will tighten the market, but only time will tell how the market will adjust. “I think we’re about to enter what could be a very interesting time on the Hill,” Heinemann said. “What are the new rules of the road? I think what you’ll begin to see is a gradual scaling back of government support. A lot of things are happening that are meant to bring back private capital.”

D’Vari suggested that the government’s role in the housing market simply couldn’t be maintained. “We have created too much of an intersection between politics and the market,” D’Vari said. “We have created a big monster for ourselves. There is no precedent for the way the US housing market works. By every historical measure we are off the charts.”

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