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Government-Sponsored Enterprises Reform - Issue Summary
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What is the fundamental issue? |
| The new Democratic-controlled Congress raises the prospect that GSE reform legislation may be adopted in 2007. Under the leadership of House Financial Services Committee Chairman Barney Frank (D-MA), the House has passed a bill to overhaul the regulatory oversight of the housing government-sponsored enterprises (GSEs) -- Fannie Mae, Freddie Mac, and the Federal Home Loan Banks system (FHLBanks). The bill is a product of both bipartisan legislation considered in the 109th Congress and compromise agreements between House Democrats and the Department of the Treasury. The new legislation creates a strong, independent safety and soundness regulator with broad powers analogous to current banking regulators. Senate action is uncertain. |
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| I'm a REALTOR®. What does this mean to my business? |
| Housing and real estate account for nearly 20 percent of the national economy. The GSEs buttress the nation's housing finance system by assuring stability and liquidity in all housing markets allowing investors to fund mortgages regardless of the interest rate environment, or other factors affecting the economy. The GSEs represent a significant -- now more than $1.4 trillion -- federal subsidy that supports housing and homeownership. |
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| NAR Policy: |
| NAR supports strengthening GSE financial safety and soundness regulation through an independent agency that recognizes and facilitates their unique corporate structures and public missions that assure stability and liquidity that in the nation’s housing finance system. NAR also supports the affordable housing and community development programs of the FHLBanks that provide alternative financing for Bank member credit unions, banks and thrifts. REALTORS® also support allowing regional adjustments to the maximum loan amounts (“conforming loan limits”) that the GSEs can purchase in high cost housing markets. |
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| Legislative/Regulatory Status/Outlook: |
| On March 29, 2007, the House Financial Services Committee passed H.R. 1427 – GSE Reform Bill. Over the course of the two day mark-up, there were a number of amendments, the most significant for REALTORS® was an attempt by Representative Jeb Hensarling (R-TX) to eliminate the conforming loan limit provision in H.R. 1427, arguing that it would allow the GSEs to enter the luxury home finance market. NAR worked closely with Representative Gary Miller to defeat the Hensarling amendment by a vote of 10 (in support) and 51 (opposed to the amendment). On May 29, 2007, the U.S. House of Representatives passed H.R. 1427, the “Federal Housing Finance Reform Act of 2007,” by an overwhelming bipartisan vote of 313 to 104. |
Related Information:
NAR's page on Government Sponsored Enterprises Reform (GSEs)
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Legislative Contact:
Jeff Lischer, jlischer@realtors.org, 202-383-1117
Regulatory Contact:
Lynn King, LKing@realtors.org, 202-383-1156
Media Contact:
Mary Trupo, mtrupo@realtors.org, 202-383-1007
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Link to Thomas |
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