Democratic senators, including members of
the Senate Banking Committee sent a letter to the Treasury Department and
Federal Housing Finance Agency earlier this week requesting answers to more
than two dozen questions arising out of their proposed housing finance plan. The
plan, released in early September, includes nearly 50 recommended reforms, both
legislative and administrative, to, in the words of its authors, "reduce the
role of the Federal Government in the housing finance system, enhance taxpayer
protections against future bailouts, and promote competition in the housing
finance system." Details, however, were sparse.
The senators, including several
presidential candidates, asked questions about the potential impact of
releasing the GSEs Fannie Mae and Freddie Mac from their long-term
conservatorship, the capital requirements the GSE would need to meet before
release, the eventual form of a government guarantee, the effect on housing
costs, and whether the GSEs would continue to have an affordable housing
mandate.
According to Bloomberg,
signers of the letter, which included Virginia Senator Mark Warner, and Massachusetts
Senator Elizabeth Warren said their questions are crucial in assessing whether
the administration's proposals will ensure "housing access and affordability,
and the continued success of the secondary mortgage market."
Congress has long failed to take action on
finance reform in general and resolving the GSE conservatorship issue in
particular. There is increasing concern that the Trump administration will act
to resolve the situation on its own, without congressional input or
legislation.