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Oversight of Government-Sponsored Enterprises: The Risks and Benefits of Gses to Consumers: Hearing Before the Financial Management, the Budget
Original publisher: Washington: U.S. G.P.O.: For sale by the Supt. of Docs., U.S. G.P.O., 2003. OCLC Number: (OCoLC)54055365 Subject: Government-sponsored enterprises -- United States. Excerpt: ...11 1 TESTIMONY OF W. MICHAEL HOUSE, EXECUTIVE DIRECTOR, FM POLICY FOCUS Mr. H. Thank you, Mr. Chairman. FM Policy Focus is a coa-OUSE lition of seven associations of financial services companies actively engaged in the mortgage industry. We were pleased to be invited to appear before you today and commend you for holding this hear-ing. In 1938, Congress decided to rescue a distressed mortgage mar-ket. It was a genuine example of Congressional vision and we, as an organization, strongly support this vision through the continu-ation of the core mission of the two housing GSEs, Fannie Mae and Freddie Mac. Our members also believe that more can be done to expand home ownership among all Americans and especially among minorities and households who find it financially difficult to afford a home of their own. The GSEs play a vital role in this expansion, and for this reason, Congress subsidizes them to the tune of more than $ 10 billion an-nually. However, in order for the GSEs to be in full compliance with their charters and fulfill their Congressional mandated mis-sion, they need effective government oversight founded on three important principles: Effective regulation, sound capital, and mar-ket discipline from enhanced disclosure. From where we sit today, Fannie and Freddie are zero for three. They are weakly regulated by an underfunded and understaffed agency. They hold far less capital than that required by bank regu-lators, and they are the only two publicly traded companies in the Fortune 500 that are statutorily exempt from the Nation's security laws. If they were private institutions, homeowners and investors alike would be at great risk. But since Fannie Mae and Freddie Mac are Government-Sponsored Enterprises, taxpayers could go from being in the dark about t... Hide synopsis
