Senate Banking Committee Chairman Richard Shelby, R-Ala., says he would like to see more competition between lender and GSE automated underwriting systems in the conforming loan market.The senator indicated his concern at a Tuesday committee hearing that Congress may be creating a "monopoly" for Fannie Mae's and Freddie Mac's AU systems if a new regulator does have not authority to allow other AU providers to compete with the two government-sponsored enterprises. "Wouldn't we be better off if there's more competition?" Sen. Shelby asked one banking trade group witness who objected to a "bright-line" test. The bright-line test in a Senate GSE bill would give the regulator more authority to regulate Fannie's and Freddie's activities when they encroach on lender activities. The committee chairman also said he wants more transparency in the guarantee fees Fannie and Freddie charge lenders. In testimony prepared for a Wednesday GSE hearing, Fannie interim chief executive Daniel Mudd said the regulators should be able to review the way GSEs conduct their business, but "g-fees are proprietary and should not be made public." Mr. Mudd also raised concerns about a bright-line test.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry