The mortgage market is overdue for the return of private capital, and government meddling is holding it back, said Mortgage Bankers Association CEO David H. Stevens in a strongly worded opening speech to attendees at the MBA’s Secondary Market in New York City today. 

"[Washington’s policies have] created an atmosphere where, guarantee fees have been arbitrarily raised and likewise used as an offset to pay for other budget items; an atmosphere where government is backing the bulk of the mortgage market and directly impeding any opportunity for a return of private capital," said Stevens. "[T]hese actions are actually hurting the goal of a broad and diverse industry. From community banks and credit unions to independent mortgage bankers and banks, the collective weight of change, the lack of any leadership in a future model for housing finance, and lack of coordination are our greatest challenges today."

Stevens said that Washington needs to come forward with a clear plan to transition Fannie and Freddie out of conservatorship, and that Fannie and Freddie must stop blindsiding the industry by implementing significant new policies without consultation. He said the White House should name a housing policy coordinator.

He also said that Fannie and Freddie securities should be merged into one, in order to increase market liquidity and lower guarantee fees.

"If constructed well, with industry input and ownership, a central platform could provide a significant benefit in terms of an efficient and standardized process," he said. "The beauty of this plan is that it can be done outside the halls of Congress.  It can be done now and should be done now while the risk to the marketplace is minimal."