WASHINGTON — With support from both Democrats and Republicans, the Senate Banking Committee on Tuesday approved a measure to provide relief to expand the availability of government-insured mortgages.
The bill, which passed 19-2, would create an affordable housing fund, paid for by Fannie Mae and Freddie Mac. The fund would provide $500 million for foreclosure rescues in the first year. The measure also tightens regulations of Fannie and Freddie, the main purchasers of mortgages from credit unions. It creates a new regulatory entity, the Federal Housing Finance Agency, which could order Fannie and Freddie to increase their capital.
Earlier this month, the House passed a similar measure though its key component, a taxpayer-financed mortgage relief fund, was deemed too expensive by the Bush administration, which threatened a veto.
CUNA Vice President for Legislative Affairs Ryan Donovan said they are “supportive of Congress' efforts to get rid of bad actors. But we are concerned about language requiring registration of mortgage originators, as we feel this would create unnecessary regulatory burdens.”
NAFCU Associate Director of Legislative Affairs Amanda Slater said the measure, is a “workable compromise,” but her organization “wants to be sure that all of the programs and products (of Fannie and Freddie) are still available to credit unions.”
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