Fannie, Builders Split Over Receivership

The Senate Banking Committee's decision to include receivership powers in a GSE regulator bill not only spit Republicans and Democrats, it also split two allies -- the National Association of Home Builders and Fannie Mae.It appears that Fannie Mae was willing to compromise on the issue of receivership with the Republicans, while the homebuilders supported a substitute bill, sponsored by Sen. Paul Sarbanes, D-Md., with no receivership powers. "Our paths diverged," NAHB executive director Jerry Howard told MortgageWire. "We would have loved to have seen Fannie and Freddie work to get Republican votes for the Sarbanes substitute." The Sarbanes substitute was defeated by a 9-12 vote during the April 1 mark-up of a bill drafted by the banking committee chairman, Sen. Richard Shelby, R-Ala., that would create a new regulator for the housing government-sponsored enterprises. The 11 Republicans and one conservative Democrat went on to approve the Shelby bill by a 12-9 vote after adopting an amendment by Sen. Robert Bennett, R-Utah, that would allow Congress to disapprove of a receivership action. Fannie Mae declined to clarify its position on the Bennett amendment. Meanwhile, the Bush administration said it opposes the GSE bill because the Bennett amendment weakened the receivership provisions. "The amendment could reinforce a false impression that the American taxpayer provides an implicit guarantee to these entities," the Treasury Department said.