A couple of House and Senate lawmakers provided a ray of hope on Thursday that Congress can work together to overhaul the mortgage finance system.
Sen. Mark Warner (D-Va.) and Rep. Randy Neugebauer (R-Texas) suggested during a conference held by the Bipartisan Policy Center that the two chambers should be able to sit down and hammer out their differences on legislation that would reduce the government’s role in the housing finance system.
{mosads}Warner, a member of the Senate Banking Committee, has teamed up with fellow panel member Sen. Bob Corker, a Republican from Tennessee, on legislation that would revamp Fannie Mae and Freddie Mac. It’s has picked up steam in recent months behind a bipartisan push.
“Show me a piece of legislation that starts with that kind of support,” Warner said of his bill, which has the backing of 10 members of the Banking panel equally divided between Democrats and Republicans.
The White House has expressed support for the legislation.
Warner said that should provide an impetus for the House and the Senate to work on a bill that narrows differences and would be mutually acceptable to both chambers and the White House before a possible conference.
Neugebauer, who is an author of the House legislation that was approved by the House Financial Services Committee in July, said it would be better to look at where the votes fall in each chamber to “give us a better indication of what is achievable” if the bills get to conference.
But he said that it is “so important to move this ball down the road.”
Warner took some shots at the House GOP bill, which lost some Republican votes in committee and has no Democratic support, so far, because it mostly eliminates the government guarantee.
Opponents of the House GOP measure argue that means the end of the 30-year fixed mortgage.
Warner said the House bill is “economic theory driven” and is an “interesting intellectual exercise.”
He argued that people involved in the housing industry, from bankers to mortgage brokers to home builders, “are terrified” of the House legislation precisely because it shifts the burden almost completely to private sector lenders and “completely destroys the 30-year fixed.”
The Banking committee is ramping up its efforts to produce a bill by year’s end, which would incorporate Corker-Warner and make other changes to the measure.
Warner said he would gladly change the name of the so-called Corker-Warner bill today to Johnson-Crapo, named after Banking panel Chairman Tim Johnson (D-S.D.) and ranking member Mike Crapo (R-Idaho), if it means a bill will get out of committee by the end of the November.
He urged the housing industry leaders to work with them to perfect the bill.
Warner said his aim is to “get it right.”
Meanwhile, Edward DeMarco, the regulator of Fannie Mae and Freddie Mac, said he is preparing the Federal Housing Finance Agency for a transition that Congress is required to approve.
He said the current business model for Fannie and Freddie is broken, and urged Congress to pass legislation to reposition the government-controlled entities and provide the agency with better direction as it continues to look to the future and maintain liquidity and stability in the mortgage market.