Industry News

Regulators may get power to liquidate Freddie, Fannie

Critics fear changes could limit access to mortgages

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The U.S. Senate banking committee today is set to mark up a draft bill that could give federal regulators the power to shut down Fannie Mac or Freddie Mac if either of them was in danger of insolvency. The Republican-sponsored "Federal Housing Enterprise Regulatory Reform Act of 2004" would combine supervision of all so-called government-sponsored entities under one roof and make additional reforms in how Freddie Mac and Fannie Mae are regulated. Take an Inman News poll on GSE reform. But it's the shutdown provision that has drawn the most fire from industry groups that already are lining up for and against the proposal. Critics say regulatory power to shut down the corporations could make mortgages less available. At least one critic thinks the legislation would be the first step toward elimination of the GSEs special government benefits. "It would lead to restricted access to our member banks, and beyond that we believe it would be anti-consumer and could very p...