Geitner pushes for housing overhaul bill
Tuesday, March 1st, 2011
In the remarks that US Treasury Secretary Tim Geitner intends to deliver to the House Financial Services Committee today, it is anticipated will address the views of the Obama administration on the future of Fannie Mae and Freddie Mac. Remarks he has delivered prior to the meeting indicate that he wants a housing overhaul bill in the next two years addressing in more specific terms the role of Fannie Mae and Freddie Mac should play.
Texas Republican Representative Jeb Hensarling stated at the Reuters Future Face of Finance Summit that he will introduce a bill winding down the mortgage finance giants within the next few weeks or months. Without the specifics of the bill yet release, it is difficult to tell whether the legislation will be palatable to Congress or the Obama administration.
President Obama has indicated in weeks past that he would support legislation that reduces the size and scope of the federal role in the housing market. Additionally, the administration has outlined three proposals to Congress about how it recommends the financial institutions being replaced in the long term. The first, would essentially privatize housing finance, leaving room only for the government to help ‘narrowly targeted’ low-income buyers. The second, dubbed ‘acute cost,’ would reduce taxpayer exposure to failed loans while adding ‘acute costs’ to credit borrowers. The third, named ‘backstop,’ would place emphasis on stricter regulations, but still allow for reinsurance in the times of economic catastrophe to provide a ‘backstop.’
Fannie Mae and Freddie Mac own nearly 50 percent of all US mortgages. After the housing market crashed in 2008, were resuscitated with $150 billion in taxpayers’ dollars.
Representative Scott Garrett (R - NJ), Chairman of the Subcommittee on Capital Markets and Government-Sponsored Enterprises for the House Financial Services Committee, which oversees Fannie Mae and Freddie Mac, has told Reuters that he anticipates that Republicans will introduce a bill revising the structure of the Government-Sponsored Enterprises by the end of the year.
Article by Andrew Timm
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com
Tags: fannie mae , freddie mac , garett , geitner , housing , overhaul
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