House Republican leaders have agreed to schedule a vote on a GSE regulatory reform bill in the last week of October, industry sources have told Mortgage Wire.Opposition by conservative Republicans to a GSE affordable housing fund has bottled up the legislation for four months. The House Financial Services Committee passed its government-sponsored enterprise reform bill by a 65-5 vote in late May. The AH fund is still in the bill, but with a five-year sunset provision. During the first two years, Fannie Mae and Freddie Mac would contribute 3.5% of their profits toward rebuilding affordable housing in the Gulf Coast states hit by hurricanes Katrina and Rita. A board appointed by the new GSE regulator would award the AH grants. The final provision contains additional restrictions on housing groups using funds for lobbying and political advocacy, a move designed to appease conservatives. Overall, the bill (H.R. 1461) will strengthen regulatory oversight of Fannie, Freddie, and the Federal Home Loan Banks. The Bush administration has said the House bill is not tough enough in reducing the investment portfolios of the GSEs. But House passage of GSE legislation would increase the chances that the Senate would vote on its bill (S.190), which the administration prefers.

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