Treasury to Hold Hearings About GSEs' Future

The Treasury Department and the Department of Housing and Urban Development will be holding public hearings this summer and fall to solicit advice from all stakeholders on the role the federal government should continue to play in the housing finance system and the future of Fannie Mae and Freddie Mac. "The public's input will be invaluable as we think through these difficult and complex issues," HUD Secretary Shaun Donovan said. In preparation of the hearings, Treasury is soliciting written comments on seven questions regarding the future structure of the housing finance system, how it fits within broader housing policy goals, and how system changes will contribute to sound underwriting standards and prevent abusive and deceptive lending practices. The Obama administration also is seeking comment on how to transition "from where we are today to a stronger housing finance system," Donovan told the House Finance Services Committee. Committee Republicans claim the questions and hearings just show the administration has no plan to deal with Fannie and Freddie and the mounting taxpayer costs of their conservatorships. Republicans lawmakers have proposed a bill that would close down the two government-sponsored enterprises. "This housing recovery remains fragile," the secretary warned. "Any hasty action to quickly change the composition of the GSEs or eliminate them, I have no doubt, would drive down this housing market and cause taxpayer losses to increase."