The US housing finance system continues to put taxpayers at risk in a market dominated by government-backed agencies, Federal Reserve Governor Jerome Powell said on Thursday, calling for further reform of an “unsustainable” situation.

A decade after doubts about the creditworthiness of mortgage-backed securities helped trigger the worst financial crisis since the Great Depression, systemic risk in housing remains given the concentration of mortgages in the duopoly of Fannie Mae and Freddie Mac, he said.

Housing prices may have recovered, with credit flowing under tighter underwriting standards that have made the system somewhat safer, Powell said in remarks at the American Enterprise Institute, but while “the status quo may feel comfortable today … it is also unsustainable.”

Source: cnbc economy
Fed's Powell says current US housing finance system 'unsustainable'