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.