When the Treasury secretary, Henry M. Paulson Jr., orchestrated a rescue effort for the nation’s two largest mortgage finance companies last week, most of the attention was focused on the infusion of cash and credit that the government would provide. But his plan also relies on the creation of a new regulatory agency to control the companies more tightly over the long term and to limit the risk they pose to the country’s financial system.
Treasury officials and senior lawmakers huddled behind closed doors yesterday, searching for a way the Treasury Department might safely invest in mortgage finance giants Fannie Mae and Freddie Mac without exposing taxpayers to massive losses.
Congressional leaders signaled Monday they plan to move quickly on a plan to give the Treasury temporary authority to aid Fannie Mae and Freddie Mac, as lawmakers come under pressure to take action aimed at giving assurance to the markets.
As Congress enters final negotiations over a housing-recovery package, House Democrats are splintering over whether to accept a Senate provision that would provide almost $4 billion in funding for communities to buy and rehabilitate foreclosed properties. The issue will come to a head as the Senate could pass its bill as early as today and send it to the House.
The Senate took another step Monday toward passage of a housing-recovery bill, voting 76-10 to invoke cloture on a portion of the measure. The entire package made up of different amendments requiring three separate votes for approval. The chamber voted 79-16 on June 25 to approve the first section of the measure, comprising the gist of the bill.
President George W. Bush prodded Congress to finish work on legislation to deal with the crisis in the housing market when lawmakers return from recess.
WASHINGTON -- The White House's new point man on housing said Wednesday he was "very optimistic" the Bush administration and lawmakers could reach an agreement on a huge package to backstop the flailing mortgage market.
A mortgage aid plan is on track for passage in the Senate as soon as today. The massive foreclosure rescue bill cleared a key Senate test yesterday by an overwhelming margin, with Democrats and Republicans both eager to claim election-year credit for helping hard-pressed homeowners.
With sinking home values continuing to drag down the economy, Congress is poised to approve a huge package of housing legislation, including a refinancing program aimed at rescuing hundreds of thousands of homeowners in danger of foreclosure and the most sweeping government overhaul of mortgage financing since the New Deal.
Three months after Fannie Mae and Freddie Mac won the freedom to step up home-loan purchases, the government-chartered mortgage-finance companies are doing what critics in the Federal Reserve and Congress had predicted.
The Senate began debate June 19 on the latest version of foreclosure prevention and housing oversight legislation as the White House issued a veto threat without the support of the bill's main Republican proponent.
Senate leaders unveiled a package of initiatives yesterday aimed at easing the nation's housing crisis, including an $8,000 tax credit for some first-time home buyers, a new tax deduction for some homeowners and a plan to rescue more than 400,000 borrowers at risk of foreclosure.
Senators are expected to revise their housing-assistance package to set loan limits for mortgage giants Fannie Mae and Freddie Mac at $625,000 in an effort to split the difference with House negotiators on a final package and help steady an increasingly rattled home mortgage market.
A bill designed to stabilize the housing market and reform regulation of the government-sponsored enterprises could reach the Senate floor early this week, sources said.
Members of Congress are urging House Financial Services Committee Chairman Barney Frank to stick to his guns when negotiating with the Senate on housing legislation whose House version sets higher conforming loan limits for government-sponsored enterprises. The House bill would let the GSEs buy mortgages of up to $729,500 in high-cost areas, but a Senate Banking Committee-approved bill would cap such loans at $550,000. "A permanent increase in these loan limits is critical to our constituents who desperately need access to the more affordable financing that conforming loans provide," 35 members of Congress wrote to Rep. Frank in a May 22 letter.
Freddie Mac, the No. 2 buyer and backer of U.S. home loans, spent nearly $2.2 million in the first quarter to lobby on proposals to tighten regulation of the company and other housing issues.
The head of the Senate Banking Committee said on Thursday he hopes Congress will complete a housing rescue package and send it to President George W. Bush before lawmakers take a July 4 holiday break.
THERE was lofty talk of bipartisanship in Washington, DC, this week as a bill to rescue struggling homeowners cleared a key Senate committee, the biggest hurdle it is likely to face. But the noise in the background was the unmistakable sound of horses being traded.
If you think the credit markets are shaky now, imagine what would happen if either Fannie Mae or Freddie Mac -- or both -- defaulted. These two giant "government-sponsored enterprises" (GSEs) are in the vital business of guaranteeing mortgage-backed securities.
Top Senate Banking Committee members said they were very close to a deal Thursday night on legislation to provide new oversight to mortgage giants Fannie Mae and Freddie Mac, with language that would use the two's assets to fund a proposal for the Federal Housing Administration to insure up to $300 billion in new mortgages for troubled borrowers.
The Senate Banking Committee is due on Thursday to vote on legislation that would greatly expand a federal housing program and create a new regulator for Fannie Mae and Freddie Mac, a committee source said on Monday.
The focus on the housing bill shifts to the Senate during the week of May 12 with early indications that Senate Banking Committee chairman Sen. Chris Dodd (D-Conn.) may split the House package into multiple parts, banking industry sources told BNA May 9."In a perfect world," the bill would move into a House-Senate conference, one lobbyist said. However, it is his understanding that Dodd intends to mark up separate legislation on government sponsored housing finance enterprises (GSEs) and Federal Housing Administration (FHA) reform before beginning negotiations with the House on its foreclosure rescue plan.
Despite the specter of a White House veto threat, Senate Banking Chairman Christopher Dodd said Wednesday he would go ahead with a Tuesday markup on his bill to allow the Federal Housing Administration to help refinance billions of dollars of troubled subprime loans.
As home prices continue their free fall and banks shy away from lending, Washington officials have increasingly relied on two giant mortgage companies — Fannie Mae and Freddie Mac — to keep the housing market afloat.
The regulatory hammer hangs over Fannie Mae and Freddie Mac. Legislation that would give the government more power over the two mortgage finance companies is shaping up as a key bargaining chip for Senate Democrats eager to obtain Republican support for a $300 billion housing rescue plan. That plan, sponsored by Rep. Barney Frank, D-Mass., is on track for a vote in the House next week after passing a key committee Thursday.
Explaining its executive pay for 2007, Freddie Mac yesterday put a markedly different spin on the company's performance last year from the assessment of a federal regulator in a recent report to Congress.
Treasury Department officials have stepped up efforts to strengthen the regulation of Fannie Mae and Freddie Mac, the two largest buyers of home mortgages, pressing key senators to break a legislative stalemate that has lasted for years.
After Fannie Mae's May 16 announcement that it was dropping its policy of requiring higher down payments in declining housing markets, Freddie Mac said it is eliminating a similar policy that has been in effect since 1993.
