Magazine article American Banker

Freddie Plan to Expand Charter Piques Industry

Magazine article American Banker

Freddie Plan to Expand Charter Piques Industry

Article excerpt


Freddie Mac's recent failed attempt to broaden its charter was a hot-button issue at the Mortgage Bankers Association of America's annual convention last week.

Mortgage insurers felt directly threatened by its plan to insure some loans itself, and mortgage bankers are wary of recent forays by the government-sponsored enterprises outside their usual role of providing secondary-market liquidity.

"The political environment for the GSEs has actually been hurt," said Roy J. Kasmar, president and chief operating officer of Amerin Guaranty Corp., a mortgage insurer based in Chicago.

Freddie Mac "mobilized the mortgage insurers, the MBA, and the larger lenders to be quite aggressive" in opposing the proposal.

Mr. Kasmar said his industry enjoyed the support of its customers, the mortgage bankers, because "any attempt to broaden the agencies' powers is perceived as one step closer to getting into mortgage banking."

In a press conference, Angelo Mozilo, the chief executive officer of Countrywide Credit Industries, repeatedly used the verb "nationalize" to describe what he felt the government-sponsored enterprises were attempting to do to the ancillary businesses of mortgage lending.

Mr. Kasmar said, "The industry is prepared to draw a line in the sand."

Industry veteran Mark L. Korell also attended the convention. He was just named chairman and CEO of Finet Holdings Corp., Walnut Creek, Calif.

Mr. Korell, the former chairman and CEO of Norwest Mortgage, describes his new employer as "an emerging electronic mortgage bank. …

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