Fannie Mae, Freddie Mac reform will only get harder
By Jon Prior and MJ Lee
The leading Senate proposal to get rid of Fannie Mae and Freddie Mac is stalled, and the job of figuring out what to do with the two mortgage finance giants isn’t going to get any easier in the final years of the Obama administration. The Senate Banking Committee on Thursday is set to approve a centrist bill backed by the White House, but the legislation is unlikely to advance any further this year and faces opposition from the senators most likely to be calling the shots on housing issues in the next Congress. “I think you’re looking at a different approach,” Sen. Sherrod Brown (D-Ohio), a candidate to chair the Senate Banking Committee next year, said in an interview Wednesday. “I think that’s what we’ll hope to do next year.” Of course, the political winds could change following the midterm elections in a way that boosts the prospects of the Johnson-Crapo
approach. Changes in the housing market, lingering weaknesses in Fannie and Freddie’s earnings and results from the upcoming elections could make the bill appealing to more lawmakers. “What I want to know is what the midterm elections
tell Congress about getting down to business,” said Karen Shaw Petrou, managing director of Federal Financial
Analytics, adding that housing reform could be a prime candidate for lawmakers
if they feel pressure to show bipartisan deals are achievable.