WASHINGTON (5/20/08)--The Senate Banking Committee today is expected to mark up a housing bill, the Federal Housing Finance Regulatory Reform Act of 2008, which includes significant reform of the government-sponsored enterprises (GSEs). Yesterday, Senate Banking Committee Chairman Christopher Dodd (D-Conn.) and Sen. Richard Shelby (R-Ala.) announced an agreement that would create a new regulator for Fannie Mae and Freddie Mac, and a multi-billion dollar mortgage rescue fund (Reuters
May 19). "To have Chairman Dodd and Ranking Member Shelby come to agreement on an issue as important as GSE reform is very significant,” said Ryan Donovan, CUNA vice president of legislative affairs. “It certainly makes the prospects of enactment of comprehensive housing legislation more realistic. We will be reviewing this legislation closely." Last week, CUNA President/CEO Dan Mica wrote a letter to Dodd and Shelby commending the committee for ensuring the safety and soundness of Fannie Mae and Freddie Mac. In the letter, Mica noted that credit unions rely on access to the secondary mortgage market--Fannie Mae and Freddie Mac--and the 12 Federal Home Loan Banks. He said CUNA believes changes in oversight of the GSEs must ensure that:
* Changes do not curtail the use of the automated underwriting systems developed by Freddie Mac and Fannie Mae and the arrangements in which lenders enter into commitments with the GSEs for the purchase of a fixed amount of mortgage loans at a particular rate before the specific loans are identified or closed; * Restrictions on the ability of the GSEs to offer new programs do not result in a regulatory process that hinders the development of programs, activities or products that benefit the marketplace or the participation of credit unions in the marketplace; and * Guarantee fees are not based on factors such as capital or volume of lending activity that may have the effect of favoring large lenders.
For the full text of the letter, use the link.