GOP Steps Up Effort to Phase Out Fannie,
Freddie

House of Representatives Republicans
issued seven more bills that set out to reform Fannie Mae and Freddie Mac. That
brings the total up to 15 bills since March.

The Republicans are trying to chip away at the government-sponsored
enterprises,
which back or guarantee more than $5
trillion worth of U.S. mortgages and securitize about 90 percent of all new
mortgages. The GSEs have been under federal control since September 2008 and
lawmakers in recent months have been debating about how to change its role in
the mortgage market.

“We can no longer
afford to sit back and allow the ongoing bailout of these failed institutions to
continue,” argues Rep. Scott Garrett (R-N.J.), chairman of the GSE subcommittee.
“While special interest groups and the guardians of the status quo may not want
to admit it, Fannie and Freddie’s days are numbered. It’s not a matter of if,
but when

the quicker we begin the process of dismantling
them the better off we’ll be.”

The seven
latest bills, unveiled by Republicans in the House Financial Services Committee,
set out to end bailouts for Fannie and Freddie and bring private capital into
the mortgage market. Among the bills, proposed legislation would require Fannie
and Freddie to dispose of all non-mission critical assets; set a total dollar
cap on the amount of money that can be used for the bailout of the GSEs; end the
Affordable Housing Trust Fund that provides resources for affordable housing;
and ensure replicas of the GSEs would not be created to replace Fannie and
Freddie in the future housing finance system.

The GOP will face other competing bills. The latest, a bipartisan
bill by House lawmakers John Campbell (R-Calif.) and Gary Peters (D-Mich.),
seeks to wind down Fannie and Freddie within five years and create five new
government agencies that would be privately funded.

Read more on NAR’s position on GSE Reform

Source: “Republicans Release Second Wave of GSE
Reform Bills,”
HousingWire (May 13,
2011), and
“New Round of GSE Reform Bills
Unveiled,”
LoanRateUpdate.com (May 19,
2011)

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