House Committee Approves GSE Bill

The House Financial Services Committee has approved GSE regulatory reform bill by a 45-19 vote. This legislation is expected to pass the full House later this spring by a wide margin. The bill creates a new regulatory regime for Fannie Mae, Freddie Mac and the Federal Home Loan Banks. It allows Fannie and Freddie to maintain sizeable investment portfolios, but imposes higher regulatory costs on the two mortgage giants along with an annual $600 million surcharge for a new affordable housing fund. The government sponsored enterprises bill, H.R. 1427, also raises Fannie and Freddie's conforming loan limit in high cost areas. If passed, it would also increase the Federal Housing Administration and Department of Veterans Affairs loan limits, which are tied to the conforming loan limit. GSE supporters and critics alike praised the bill that chairman Barney Frank, D-Mass., pushed through committee, which has garnered Treasury Department support. FM Policy Focus said the committee crafted a bill that will "prevent GSE misbehavior while providing the financing and stability the housing market requires." The National Association of Realtors, Mortgage Banker Association, America's Community Bankers, Independent Community Bankers, and other industry groups expressed support for the bill. "MBA hopes the Senate Banking Committee will soon consider GSE regulatory reform legislation," MBA chairman John Robbins said.