Fannie Mae and Freddie Mac
Purchase Real Estate Mortgages
House Republicans plan discussion on ways to end the government control of mortgage goliaths Fannie Mae (FNMA) and Freddie Mac ( FMCC).
On Wednesday Feb 2, 2011, Rep. Scott Garrett (R., N.J.) stated there's a subcommittee hearing planned for Feb. 9 to discuss steps to terminate the federal jurisdiction of these two mortgage-finance giants, which were put into a legal control by the government in September 2008. This rescue has cost U.S. taxpayers approximately $134 billion thus far.
Garret Said "Congress must
immediately take measures to reduce this expense and guarantee that taxpayers are never again be put in these circumstances " The current state of affairs is not acceptable, which is the very reason we will keep on looking for alternative answers to housing economics in the U.S. that diminish the government's liability and move private capital into the forefront"
Garrett chairs the Financial Services Committee of the House's subcommittee which oversees capital markets, and as such will watch over the GOPs' efforts to restructure the mortgage business.
Fannie Mae and Freddie Mac purchase real estate mortgages, repackage them into securities and market them to investors
guarantying against any default. They have assisted in ensuring that loans for homes are constantly available even in the face of the housing market's collapse.
Expected to be announced this month is a Treasury Department account on the outlook for these mortgage giants . It most likely will contain a number of alternatives for what should be substituted Fannie and Freddie, with debate over the merits and disadvantages of those attempts.
Republicans say President Obama's cabinet has not been willing to undertake the thorny issue.
"Simply because the president's administration is not ready to take action on the reform of (Fannie-Freddie) doesn't signify that Republicans in the House will take no action," said financial services panel chairman, Rep. Spencer Bachus, (R., Ala.) .
Although a number of Republicans state they prefer a mortgage structure that functions without government intervention, bankers, home builders and real-estate agents lobbyists claim the government still should play a part in providing mortgage-backed securities guarantees.
Feb 05, 2011