Housing finance reform is expected to be at the top of the agenda in Congress at the beginning of the new session, but unless the initiatives move forward quickly, chances increase they will stall as the mid-term elections approach in November. The bi-partisan proposal introduced in the Senate will pare down Fannie Mae and Freddie Mac and establish a government backstop, according to nationalmortgagenews.com. This measure may form the backbone for legislation that is finally introduced by the Senate Banking Committee, but the question remains if it will take precedent over immigration reform, the budget and tax reform. Additionally, as James Ballantine of the American Bankers Association (ABA) says, when will the Obama administration weigh in on the measure. He says, “Once you start getting a sense that that type of legislation has momentum, it may attract some barnacles that you won’t be able to take off and that could be to the detriment of the legislation.”
Meanwhile in the House, a more conservative plan, the Protecting American Taxpayers and Homeowners (PATH) Act, did pass out of the banking panel but stalled before it got to the House floor. Some analysts say its failure to reach the floor reflects a division in the Republican caucus on a bill that is very unpopular with the housing industry. However, as MHProNews has learned, if the Senate begins moving its bill forward, the House may respond by moving the PATH Act to the fore, and pass it in order to maintain negotiating power with the Senate’s version of housing finance reform.
