|
Mortgage Holdings a Sticking Point for GSE Reform Bill
The Senate adjourned on Aug. 4 for its month-long summer recess without passing S. 190, a bill that would severely curtail the investment portfolios of Fannie Mae and Freddie Mac.
Senate Banking Committee Chairman Richard Shelby (R-Ala.), who had hoped to bring the measure to the Senate floor before lawmakers left the nation’s capital, still maintains that there is time to pass comprehensive government sponsored enterprise (GSE)-reform legislation before the fall elections.
However, several other senators have expressed skepticism because Shelby has yet to offer a specific compromise to bridge a partisan divide with Democrats primarily over the portfolio issue, and it is uncertain whether the legislation will ultimately reach the Senate floor.
NAHB opposes the bill because it would force the two housing finance entities to engage in a massive sell-off or run-down of existing holdings, disrupting the mortgage markets and harming the housing finance system.
Senate Majority Leader Bill Frist (R-Tenn.) has indicated that he will not bring S. 190 to the floor until Shelby reaches a compromise.
In a related development, Freddie Mac recently agreed, at the request of the Office of Federal Housing Oversight (OFHEO), to voluntarily limit the growth of its $710 billion in mortgage holdings to 2% a year until it resumes publishing regular quarterly financial reports.
Fannie Mae agreed to cap its mortgage portfolio at about $727 billion two months ago.
While some have speculated that the voluntary portfolio limits could pave the way for a compromise on GSE reform legislation, others point out that this only demonstrates that OFHEO already has the ability to properly regulate the housing GSEs.
NAHB will continue to monitor this debate throughout the August recess as its staff on Capitol Hill prepares for the short legislative session prior to the November elections.
To view Senate legislation S. 190, click here and enter the bill number in the box at the center of the page.
For more information, e-mail Scott Meyer at NAHB, or call him at 800-368-5242 x8144.
|
