It is quite clear that comprehensive legislative reform of the government-sponsored enterprises is not going to happen this year. But Congress is still considering adopting piecemeal housing finance provisions in advance of a broader longer-term proposal. Unfortunately, those piecemeal provisions risk setting GSE reform on the wrong path.

Without comprehensive steps mandated by Congress, the Federal Housing Finance Agency and the GSEs have made constructive progress to reform the way they do business that has increased efficiency in the mortgage system and provided taxpayers with more protection. Since 2013, they have been working together to create a Common Securitization Platform and a related single security for GSE mortgage-backed securities in order to improve pricing and consistency. And the GSEs have aggressively implemented risk-sharing – credit transfers to the private sector – to protect the GSEs and therefore the taxpayers from losses.

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