Congress is running out of time to look into major legislation given the approaching midterms in November
Fannie Mae and Freddie Mac will remain under the US government’s conservatorship for now as efforts to reform housing finance in the present Congress have so far failed, according to a report by Bloomberg.
Senators Bob Corker (R-Tenn.) and Mark Warner (D-Va.), who have played important roles in reform efforts, acknowledged that legislative changes to housing finance are dead, for now. The senators commented about the government-sponsored enterprises during a Senate Banking Committee hearing with Federal Housing Finance Agency (FHFA) Director Mel Watt.
“My sense is that these institutions may well stay in conservatorship for some time,” Corker said.
The senators attempted to come up with legislation that preserved the current operations of the GSEs while allowing new competition to enter the market. However, progressives did not support the effort because they want to retain the affordable-housing mandates on Fannie and Freddie.
According to the report, Congress’ failure to enact housing-finance report means the GSEs will have been under federal control for more than a decade.
The senators expect the FHFA to carry out administrative changes to the GSEs. President Donald Trump is set to name a new director in 2019. Wait said during the hearing the he continues to believe that the future of Fannie and Freddie should be determined by Congress rather than the FHFA.
Sources told Bloomberg that while the Trump administration remains in the early stages of coming up with a plan for the GSEs, private meetings are currently underway. Treasury Secretary Steven Mnuchin said in a recent interview that he wants to take action on the GSEs after the midterm elections.