Government-Sponsored Enterprises Important to Home Buyers and Sellers
November 13, 2006
NEW ORLEANS, -- It is in the best interest of homeowners, buyers and sellers, that the nation has strong, viable and flourishing government-sponsored enterprises (GSEs), said Thomas M. Stevens, president of the National Association of Realtors(R), at the association's Regulatory Issues Forum here yesterday.
The forum, a part of NAR's annual Conference & Expo, focused on the important role GSEs, including Fannie Mae, Freddie Mac, and the Federal Home Loan Banks play in promoting homeownership. The forum also covered proposed increased regulation by the Bush administration and proposed regulatory reform legislation.
"Congress has been stalemated on what to do and the Bush administration continues to press for regulatory reform that essentially means more regulation -- tighter regulation -- of the housing enterprises. Severely limiting regulation does not serve the housing, real estate industry or the financial industry well," said Stevens.
"NAR believes it is in the best interest of home sellers and buyers that housing GSEs not become over-regulated and restricted from achieving their important mission of providing affordable mortgages to all qualified potential home buyers.
Congress chartered Fannie Mae and Freddie Mac to facilitate a residential, secondary mortgage market that provides a stable supply of funding to mortgage lenders. Congress created the FHL bank system in 1932 to improve the supply of housing funds to member financial institutions in the system's regional districts. Those enterprises have continued providing housing funds to financial institutions, supporting housing as their core mission. GSEs assure that homeownership opportunities are funded consistently.
"The housing industry thrives because the GSEs make mortgage credit consistently available for home buyers at reasonable costs," said Patti Cook, executive vice president of Freddie Mac. "We support strengthened oversight; however, it's critical that any new structure allow us to continue to meet our vital housing mission."
"Federal Home Loan Banks, and other GSEs, are a vital tool against possible credit crunches and are a reliable, readily accessible funding partner, bridging Wall Street with Main Street. We keep the cost of borrowing low for our members, which helps keep costs low for potential homebuyers," said John Price, president and CEO of the Federal Home Loan Bank Board of Pittsburgh.
Source National Association of Realtors