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BRIEF-U.S. mortgage group outlines framework on GSE reform
April 20, 2017 / 8:36 PM / 8 months ago

BRIEF-U.S. mortgage group outlines framework on GSE reform

April 20 (Reuters) - The Mortgage Bankers Association on Thursday released a report on proposed changes in a possible reform of the secondary U.S. mortgage market including the role of mortgage government-sponsored enterprises Fannie Mae and Freddie Mac.

* U.S. mortgage industry group says it recommends a multiple guarantor model with at least two entities, preferably more, in a reform of secondary mortgage market.

* Reform should ensure a robust private mortgage market that can exist parallel to a government-backed market.

* Rechartered successors to Fannie Mae, Freddie Mac will likely be the first two guarantors.

* A U.S. regulator would be allowed to charter more mortgage guarantors in bid to promote competition

* Mortgage guarantors would be monoline, regulated utilities owned by private shareholders.

* A mortgage insurance fund with explicit government guarantee should be created to back eligible mortgage-backed securities. Further company coverage: (Reporting By Richard Leong)

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