House Republicans, led by Rep. Jeb Hensarling of Tex., Chairman of the House Financial Services Committee, are getting set to introduce mortgage finance reform legislation that will totally eliminate government sponsored enterprises (GSEs) and replace them with a private system. Knowing all the features are not likely to pass, the goal of the representatives who are assisting in drafting the measure is to mark a point from which to negotiate. The bipartisan bill from the Senate, introduced by Bob Corker (R-Tenn.) and Mark Warner (D-Vir.), while cutting out Fannie Mae and Freddie Mac, would still provide a definite role for the government in the mortgage market, and has already received some industry support. If Hensarling is too unyielding, he’s likely to lose support of the GOP representatives who have ties to the housing industry, according to what nationalmortgagenews tells MHProNews. If too moderate, he may lose the more conservative members who are dead set on eliminating the GSEs. Says Brandon Barford, a vice president at ACG Analytics, “Negotiating with the Senate and the White House and other stakeholders, I think he’s going to have difficulty if his bill is dramatically different than Corker-Warner, if there’s little to no government role. I also question whether he (Hensarling) has enough votes to get it out of committee. He’s not going to get any Democrats, and he has a very slim margin to lose Republicans.”
