Central South Dakota News

U.S. Senator Mike Rounds and U.S. Representative Mike Flood have expressed their approval of the current administration's support for credit risk transfer (CRT) programs at Fannie Mae and Freddie Mac. In a letter addressed to Federal Housing Finance Agency (FHFA) Director William Pulte, both lawmakers commended his commitment to CRT initiatives and urged continued backing for policies that leverage private capital.

"Housing affordability and system stability are top priorities for Americans today," they stated in the letter. "De-concentrating mortgage credit risk away from the government to willing private sector participants through CRT can promote both of those goals."

The letter emphasized that since 2013, CRT has been pivotal in transferring $210 billion of mortgage credit risk from federal oversight to private investors, impacting over $6.7 trillion in mortgages. This approach is seen as a means to reduce taxpayer exposure while maintaining affordable mortgage access.

President Trump has instructed federal agencies to focus on lowering housing costs and expanding supply, objectives which align with enhancing Enterprise CRT programs.

The communication also highlighted that CRT helps distribute risk across a wide range of private investors who are motivated by financial stakes to monitor risks effectively. This mechanism aids in accurate pricing of risks, thereby reducing potential housing bubbles.

Senator Rounds reiterated his long-standing support for CRT during Director Pulte’s confirmation hearing earlier this year, identifying it as an essential tool for safeguarding taxpayers.

"We appreciate your attention to this critical issue and look forward to working with you," concluded the lawmakers in their correspondence with Director Pulte.