Home builders and Realtors are urging Republican leaders on the House Financial Services Committee to postpone action on eight GSE bills, claiming this could impede a recovery in the housing market.
The legislation is designed to start the process of downsizing Fannie Mae and Freddie Mac by raising their loan guarantee fees, reducing their giant mortgage portfolios and requiring regulators to impose risk retention on the GSEs' mortgage-backed securities.
The Capital Markets and Government Sponsored Enterprise subcommittee is slated to mark up and vote on the bills this Tuesday (April 5).
In a letter to the lawmakers, the National Association of Home Builders and National Association of Realtors say they support comprehensive and coordinated reform of the housing finance system.
"Our organizations strongly believe the piecemeal approach represented by the eight bills would further damage the already fragile housing market and impede economic recovery," the April 1 letter says.
Subcommittee chairman Scott Garrett, R-N.J, said he will "move forward as scheduled with a markup of the bills to end the bailout, protect taxpayers and get private capital off the sidelines."
Rep Garrett and other Republican lawmakers view the markup session as the first step in eventually privatizing Fannie and Freddie.
But the trade groups contend housing financing cannot be left entirely to the private sector and a government backstop is needed to ensure a consistent and adequate supply of mortgage credit.
"Our organizations therefore believe that it is premature to begin dismantling the current housing finance system, as represented by the markup of these eight bills, until there is a clear vision for the future housing system, and a thoughtfully-designed path for a non-disruptive transition to the new framework."
