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GSE, fair-lending policies could look radically different if Biden wins

August 24, 2020, American Banker

Dwight Smith spoke with the American Banker about the impact of a presidential change in 2020 on government-sponsored enterprises. Mr. Smith says, “As far as the Trump administration goes on the GSEs, they've got their path forward with the plan that came out last September. I would think that the FHFA and the enterprises would just keep moving forward.”

He adds, “Regardless of the Supreme Court's decision, I think [Biden] will be much more focused on affordable housing, and because the Biden administration will control Treasury, FHFA has less ability to move forward with privatization. I think that a new administration can exercise some control over the FHFA, even though, under the statute right now, there's not the same ability to simply fire the head.”

Regarding the measures to address the affordability of housing, Mr. Smith says, “I think the one wild card for the Trump administration would be affordable housing. I have this sense that we might be headed for a cliff event on the ability of borrowers to repay their mortgages, particularly at the lower end of household incomes.”

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