Representatives Jeb Hensarling and Randy Neugebauer, Texas Republicans who serve as the vice chairman and chairman of the Financial Services investigations subcommittee respectively, introduced bills limiting the portfolios of Fannie Mae and Freddie Mac and increasing the guarantee fees the companies require to insure mortgages.
The two government-sponsored enterprises own or guarantee more than half of U.S. $154 Billionįannie Mae, based in Washington, and McLean, Virginia-based Freddie Mac have been sustained by $154 billion in Treasury funds since they were seized in September 2008.
The measure would also express the sense of Congress that the 2010 pay packages of Fannie Mae and Freddie Mac senior executives should be returned to the government.Īny legislation that cleared the Republican-controlled House would need approval by the Democrat-dominated Senate and President Barack Obama. Representative Spencer Bachus, an Alabama Republican who is the chairman of Financial Services, introduced a bill that would place the employees of Fannie Mae and Freddie Mac, which have been run by the federal government since 2008, under the government’s compensation structure. “We’ll be looking at doing other rounds as we go forward and get these bills under our belts,” Garrett said. In the weeks ahead, the panel will likely introduce other legislation designed to chip away at the government’s involvement in the firms. The proposals mark the first round of measures aimed at incremental changes to Fannie Mae and Freddie Mac, Garrett said. “If you look through their white paper, if you look at what we have, in essence we’re on the same page.” First Round When it comes to the Treasury, “at the end of the day, we have the same ultimate goal to achieve here,” Garrett said at a press conference today. Garrett’s panel will hold a hearing on March 31 on the proposals. Most of the Republican proposals line up with a list of recommendations put forth in February by the Treasury Department and the Department of Housing and Urban Development. Representative Scott Garrett, a New Jersey Republican and chairman of the capital markets panel of the House Financial Services Committee, is leading the effort. The bills “represent immediate steps that Congress can take to begin building a stable housing finance system based on private capital rather than guarantees provided by the taxpayer,” according to a Republican staff memo circulated last night to committee members. The proposed legislation would cut the value of the companies’ combined $1.5 trillion loan portfolio, raise the fees they charge to guarantee loans and reduce executive compensation. The measures would wind down the firms in phases as policy makers work on a broader overhaul of the mortgage market. House Republicans proposed legislation that would begin reducing the influence of government-run mortgage companies Fannie Mae and Freddie Mac. Republicans Push Bills to Wind Down Fannie Mae, Freddie Mac
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