president bush tried to fix freedie mac & fannie mae 5 years ago, but the communists like barney frank of massachusetts and his camarade melvin l. watt of north carolina blocked. now the communists using race card by using hussein obama as their bait to destory america
เดช
September 11, 2003
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
By STEPHEN LABATON
The Bush administration today recommended the most significant
regulatory overhaul in the housing finance industry since the savings
and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new
agency would be created within the Treasury Department to assume
supervision of Fannie Mae and Freddie Mac, the government-sponsored
companies that are the two largest players in the mortgage lending
industry.
The new agency would have the authority, which now rests with
Congress, to set one of the two capital-reserve requirements for the
companies. It would exercise authority over any new lines of business.
And it would determine whether the two are adequately managing the
risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of
Fannie Mae and Freddie Mac -- which together have issued more than
$1.5 trillion in outstanding debt -- is broken. A report by outside
investigators in July concluded that Freddie Mac manipulated its
accounting to mislead investors, and critics have said Fannie Mae does
not adequately hedge against rising interest rates.
''There is a general recognition that the supervisory system for
housing-related government-sponsored enterprises neither has the
tools, nor the stature, to deal effectively with the current size,
complexity and importance of these enterprises,'' Treasury Secretary
John W. Snow told the House Financial Services Committee in an
appearance with Housing Secretary Mel Martinez, who also backed the
plan.
Mr. Snow said that Congress should eliminate the power of the
president to appoint directors to the companies, a sign that the
administration is less concerned about the perks of patronage than it
is about the potential political problems associated with any new
difficulties arising at the companies.
The administration's proposal, which was endorsed in large part today
by Fannie Mae and Freddie Mac, would not repeal the significant
government subsidies granted to the two companies. And it does not
alter the implicit guarantee that Washington will bail the companies
out if they run into financial difficulty; that perception enables
them to issue debt at significantly lower rates than their
competitors. Nor would it remove the companies' exemptions from taxes
and antifraud provisions of federal securities laws.
The proposal is the opening act in one of the biggest and most
significant lobbying battles of the Congressional session.
After the hearing, Representative Michael G. Oxley, chairman of the
Financial Services Committee, and Senator Richard Shelby, chairman of
the Senate Banking Committee, announced their intention to draft
legislation based on the administration's proposal. Industry
executives said Congress could complete action on legislation before
leaving for recess in the fall.
''The current regulator does not have the tools, or the mandate, to
adequately regulate these enterprises,'' Mr. Oxley said at the
hearing. ''We have seen in recent months that mismanagement and
questionable accounting practices went largely unnoticed by the Office
of Federal Housing Enterprise Oversight,'' the independent agency that
now regulates the companies.
''These irregularities, which have been going on for several years,
should have been detected earlier by the regulator,'' he added.
The Office of Federal Housing Enterprise Oversight, which is part of
the Department of Housing and Urban Development, was created by
Congress in 1992 after the bailout of the savings and loan industry
and concerns about regulation of Fannie Mae and Freddie Mac, which buy
mortgages from lenders and repackage them as securities or hold them
in their own portfolios.
At the time, the companies and their allies beat back efforts for
tougher oversight by the Treasury Department, the Federal Deposit
Insurance Corporation or the Federal Reserve. Supporters of the
companies said efforts to regulate the lenders tightly under those
agencies might diminish their ability to finance loans for lower-
income families. This year, however, the chances of passing
legislation to tighten the oversight are better than in the past.
Reflecting the changing political climate, both Fannie Mae and its
leading rivals applauded the administration's package. The support
from Fannie Mae came after a round of discussions between it and the
administration and assurances from the Treasury that it would not seek
to change the company's mission.
After those assurances, Franklin D. Raines, Fannie Mae's chief
executive, endorsed the shift of regulatory oversight to the Treasury
Department, as well as other elements of the plan.
''We welcome the administration's approach outlined today,'' Mr.
Raines said. The company opposes some smaller elements of the package,
like one that eliminates the authority of the president to appoint 5
of the company's 18 board members.
Company executives said that the company preferred having the
president select some directors. The company is also likely to lobby
against the efforts that give regulators too much authority to approve
its products.
Freddie Mac, whose accounting is under investigation by the Securities
and Exchange Commission and a United States attorney in Virginia,
issued a statement calling the administration plan a ''responsible
proposal.''
The stocks of Freddie Mac and Fannie Mae fell while the prices of
their bonds generally rose. Shares of Freddie Mac fell $2.04, or 3.7
percent, to $53.40, while Fannie Mae was down $1.62, or 2.4 percent,
to $66.74. The price of a Fannie Mae bond due in March 2013 rose to
97.337 from 96.525.Its yield fell to 4.726 percent from 4.835 percent
on Tuesday.
Fannie Mae, which was previously known as the Federal National
Mortgage Association, and Freddie Mac, which was the Federal Home Loan
Mortgage Corporation, have been criticized by rivals for exerting too
much influence over their regulators.
''The regulator has not only been outmanned, it has been outlobbied,''
said Representative Richard H. Baker, the Louisiana Republican who has
proposed legislation similar to the administration proposal and who
leads a subcommittee that oversees the companies. ''Being underfunded
does not explain how a glowing report of Freddie's operations was
released only hours before the managerial upheaval that followed. This
is not world-class regulatory work.''
Significant details must still be worked out before Congress can
approve a bill. Among the groups denouncing the proposal today were
the National Association of Home Builders and Congressional Democrats
who fear that tighter regulation of the companies could sharply reduce
their commitment to financing low-income and affordable housing.
''These two entities -- Fannie Mae and Freddie Mac -- are not facing
any kind of financial crisis,'' said Representative Barney Frank of
Massachusetts, the ranking Democrat on the Financial Services
Committee. ''The more people exaggerate these problems, the more
pressure there is on these companies, the less we will see in terms of
affordable housing.''
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
''I don't see much other than a shell game going on here, moving
something from one agency to another and in the process weakening the
bargaining power of poorer families and their ability to get
affordable housing,'' Mr. Watt said.
GeekBoy
Me
> http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575A...
Nice, but why would we believe that latter are not his friends too?