Lawmakers to Explore Ways to Recoup Money from GSEs

Leaders of the House Financial Services Committee say they are looking for ways to recoup the billions of dollars the federal government has sunk into the GSEs over the past two years.

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Taxpayer support to shore up the nation's two largest mortgage companies â€" ""Fannie Mae"":http://www.fanniemae.com and ""Freddie Mac"":http://www.freddiemac.com â€" stands at $145 billion so far. Estimates from the federal government put the tab for subsidizing the two GSEs at $389 billion, when all is said and done â€" the costliest bailout of the crisis.

On Thursday, Fannie Mae said it needed $1.5 billion more to cover its net worth deficit from the second quarter. It's a much smaller amount than the company's typical allowance requests, but it's still adding to the tab. Last quarter Fannie drew $11.5 billion on its line of credit from taxpayers.

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Rep. Barney Frank (D-Massachusetts), chairman of the ""House Financial Services Committee"":http://financialservices.house.gov/press/PRArticle.aspx?NewsID=1345, and his lieutenant, Rep. Paul Kanjorski (D-Pennsylvania), have summoned their committee members for a series of hearings in September on the GSEs and the housing finance system.

And Kanjorski says they will explore possibilities for recovering the costs that taxpayers have incurred from the 2008 decision to place Fannie Mae and Freddie Mac into conservatorship.

""Twenty years ago, we found a way for industry to pay back the sizable U.S. Treasury payments for resolving the savings-and-loan crisis. We can do it again,"" Rep. Kanjorski said.

The congressman also plans to look into the Federal Housing Finance Agency’s (FHFA) recent efforts to recoup funds from the issuers of underwater securities purchased by the GSEs, as well as whether Fannie and Freddie are accurately pricing guarantee fees to cover risks and provide a reasonable return.

Chairman Frank says now that the GSEs have been under government control for two years and financial reform legislation has been enacted to prevent reckless, predatory lending in the private sector, it’s time to “move to the next phase, a complete restructuring of the tangle of housing finance tools so that we move forward in a way that protects taxpayers, prevents economic turmoil, and appropriately serves all aspects of the housing market.”