The U.S. housing finance system continues to put taxpayers at risk in a market dominated by government-backed agencies, Federal Reserve Governor Jerome Powell said yesterday, calling for further reform of an "unsustainable" situation, Reuters reported. A decade after doubts about the creditworthiness of mortgage-backed securities helped trigger the worst financial crisis since the Great Depression, systemic risk remains given the concentration of mortgages in Fannie Mae and Freddie Mac, he said. "We're almost at a now-or-never moment," Powell said, arguing that the window for political action on an overhaul of housing finance may not stay open for long. Key lawmakers in the House and Senate have started to examine proposals to overhaul housing finance, and U.S. Treasury Secretary Steven Mnuchin has also indicated the issue a top priority. Policymakers have struggled for years to craft legislation to significantly reform Fannie and Freddie. The federal government bailed out Fannie and Freddie in 2008 after they took massive losses on bad mortgages. They have been in government conservatorship ever since and most mortgages are still issued with the backing of government-sponsored enterprises.
