Gridlock expected on Fannie, Freddie fate

Backers of privatization pick up political clout in election

NEW ORLEANS — With Republicans regaining control of the U.S. House of Representatives — and leadership of key committees like Financial Services — the debate over the future of Fannie Mae and Freddie Mac is likely to move to the right, with those who advocate privatizing the companies having a greater say.

Expanding the debate over Fannie and Freddie’s future is likely to push back any legislation restructuring the mortgage guarantors’ current role to 2012 or beyond, federal policy specialists with the National Association of Realtors told members attending the group’s annual conference today in New Orleans.

The shift to the right could also mean a push for further tightening of FHA lending standards, while concerns about mounting deficit spending could threaten tax subsidies for homeowners such as the mortgage interest deduction and capital gains tax cuts enacted by President George W. Bush.