An Overview of GSE Reform

Abstract

Fannie Mae and Freddie Mac, the mortgage securitization government-sponsored enterprises (GSEs), have been in conservatorship since 2008. This article looks at various proposals to reform the securitization process for conventional mortgages using the format of a bingo board. The bingo board format offers an overview of the primary functions of the securitization process and what entities can provide those services. GSE reform proposals have mirrored the structure of the private-label mortgage market and the government mortgage market. In the absence of congressional action, Fannie Mae and Freddie Mac have been significantly transformed by their regulator. The transformed entities may be a basis for future reform.