Tag Archives: House Financial Services Committee

Lawmakers are outraged at the amount of bonus pay awarded to executives at Fannie Mae and Freddie Mac...and they're not stopping with hot-tempered rhetoric. Rep. Spencer Bachus, chairman of the House Financial Services Committee, has scheduled a committee vote for next Tuesday on a bill that would suspend the compensation packages awarded to the GSEs' top executives. Sens. Jay Rockefeller and John McCain say they plan to follow suit with a similar bill in their own chamber.

Rep. Scott Garrett, chairman of the House subcommittee responsible for matters related to the nation's two largest mortgage financiers, says Fannie Mae and Freddie Mac are not only systemically dangerous to economic security, but their government-sanctioned structure is ""un-American."" Garrett has unveiled his plan for putting housing finance reform on the fast track by ensuring private investors are ready to take up the slack from the GSEs. The sheer dominance of the two companies, however, leads some in the industry to err on the side of caution.

Republican members of the House Financial Services Committee point to the GSEs and the Obama administration's housing programs as areas for Congress' deficit reduction super-committee to examine as it works toward cutting $1.5 trillion of the nation's debt. A letter drafted by Chairman Spencer Bachus and signed by 20 Republican committee members first calls for an increase in the GSEs' guarantee fees and then the elimination of such programs as HAMP and HUD's Neighborhood Stabilization Program.

At a congressional hearing Wednesday, witnesses voiced concerns about the government's participation in the mortgage market as well as the lack of transparency between servicers and investors. One analyst described the U.S. housing finance system, where the GSEs account for over 90 percent of new mortgages, as ""problematic."" Others said government is crowding out the private market with programs that make below-market-rate loans available to nearly all borrowers, and they advocated for the expiration of increased conforming loan limits.

The House Financial Services Committee is considering a bill to ease the pressure that unsold inventories of vacant, foreclosed homes are putting on the housing market. The Neighborhood Preservation Act would authorize FDIC-member banks, Fannie Mae, and Freddie Mac to enter into five-year lease agreements to rent REO properties back to the foreclosed homeowner. News surfaced last month that the administration was considering such a policy for Fannie and Freddie, but a group of bipartisan U.S. representatives want to enact it with legislation.

Two lawmakers, one Republican and one Democrat, have joined forces to push federal legislation through that would facilitate wider use and shorter transaction timelines for a foreclosure alternative that some say could be a lifeline for millions of underwater homeowners while drastically reducing the number of empty, repossessed homes lining U.S. neighborhoods - the short sale. The bill would impose a deadline of 45 days on lenders to give an approval, disapproval, or status of a decision on an offer for a short sale.

A House subcommittee convened Tuesday to mark-up eight bills aimed at winding down Fannie Mae and Freddie Mac. While lawmakers agree that reform is needed, they were divided on just how to proceed with the medley of individual bills in front of them. Republicans' string of separate bills, which could ultimately tally 24, is a conscious effort to pull in Democratic support on individual reforms. But some are calling the multiple-bill approach for a single-end-goal ""scattered"" and ""without vision.""

In a legislative hearing scheduled for Thursday, the House Financial Services Committee will listen to eight proposals centered around winding down Fannie Mae and Freddie Mac on a faster timeline than proposed by the Obama administration last month. The eight proposals include measures to raise guarantee fees the GSEs will charge for mortgage-backed securities they insure and to prevent the GSEs from offering any new products while they are under conservatorship.

House Republicans may have succeeded in passing legislation to end federal housing programs that are intended to provide assistance to unemployed homeowners and support efforts to clean up vacant foreclosed homes, but their Democratic counterparts aren't going to take it lying down. Rep. Barney Frank, the top-ranking Democrat of the House Financial Services Committee, has introduced legislation that would require the biggest banks and hedge funds to cough up $2.5 billion to keep those very same programs alive.

More backlash from the 27-page proposed servicer settlement developed on Wednesday when representatives from the House Financial Services Committee voiced their disapproval and concern in a letter to Treasury Secretary Timothy Geithner. The letter, signed by committee chairman Spencer Bachus and four other members, was obtained by DS News on Thursday. It contains a page of questions the group wants answered, with a great deal of attention focused on principal write-down mandates.