Has FNMA Gotten Too Big to Control?
Has Fannie Mae gotten too big to control? That was one of the many questions asked to Senators & Congressman while in Washington DC.
The agreement on whether Fannie Mae has gotten too big to control was unanimous. Most believe that the company is too large and complex to be effectively managed by the government. They argue that Fannie Mae is too big to fail, and that if it were to collapse, it would have a devastating impact on the housing market.
Others believe that Fannie Mae is sorta manageable, and that the government has taken steps to reduce the risk of a collapse. They point out that Fannie Mae is now under the control of the Federal Housing Finance Agency (FHFA), which has a mandate to protect taxpayers from financial losses. FHFA has allowed Fannie Mae to act as if it has zero oversight.
Ultimately, the question of whether Fannie Mae is too big to control is a complex one. There are strong arguments on both sides of the issue. Only time will tell whether the government will be able to effectively manage the company in the long term. As it stands right now the answer is NO. Their blatant elimination of real estate appraisers is a front and center line item for them. The use of unqualified, unregulated, unlicensed, and uninsured data collectors speaks volumes. It harms the consumer. It harms the industry. It harms the individual appraiser. It harms all small business owners.
Here are some of the factors that have been cited as evidence that Fannie Mae IS too big to control:
The company’s size: Fannie Mae is one of the largest financial institutions in the world, with assets of over $17 trillion. Possibly more than that.
The company’s complexity: Fannie Mae’s business is highly complex, and it is difficult for regulators to fully understand the risks involved. The regulators don’t want to know. Which is why we will continue to speak with Senators in Washington DC.
The company’s interconnectedness: Fannie Mae is closely interconnected with other financial institutions, so its collapse could have a ripple effect throughout the financial system. That’s not horrifying at all.
The Average Joes will keep lobbying and fighting. It’s not over until the fat lady sings. We are not giving up on OUR profession.