Does Bush Win Ensure GSE Reform?

The re-election of President Bush and GOP gains in the House and Senate have increased the likelihood that legislators will pass meaningful GSE reforms next year.According to industry officials, election gains by the Republicans will make it more difficult for Fannie Mae and Freddie Mac to fend off unwelcome provisions when government-sponsored enterprise reform legislation is introduced early next year. Industry lobbyist Jim Butera predicted that passage of a GSE bill is a "near certainty" next year. Mr. Butera forecast that it will be "the No. 1 bill coming out" of the House and Senate banking committees. Meanwhile, at MortgageWire's deadline, Fannie's stock was down 3%, Freddie's 2%. Industry consultant Bert Ely said the stock market is interpreting Mr. Bush's victory as a negative. Mr. Ely also predicted that the administration might "actually begin" to limit the GSEs' debt issuances.