MBA Raps GOP Bill's Portfolio Limits

The Mortgage Bankers Association considers a GSE regulatory reform bill introduced by four Republican senators to be "well-crafted" but says it cannot go along with the limits on the Fannie Mae and Freddie Mac mortgage portfolios.In a letter to Senate Banking Committee leaders, the MBA says it "strongly supports" the regulatory regime contained in a government-sponsored enterprise bill (S. 1100) sponsored by Sens. John Sununu (N.H.), Chuck Hagel (Neb.), Elizabeth Dole (N.C.), and Mel Martinez (Fla.). But that support does not apply to the section that says Fannie and Freddie can only add affordable housing loans to their mortgage portfolios. "It is appropriate to encourage the GSEs to use their investment portfolios in furtherance of affordable housing; however, we believe the regulator should have broad authority and flexibility to determine the type and amount of assets the GSEs hold in portfolio," the MBA says. The association said it is more comfortable with the portfolio language in a GSE bill that the House is expected to pass in May and has the support of the Bush administration.