FED-DOCS Y 4.F 49/20:108-54 H.R. 2575-THE SECONDARY MORTGAGE MARKET ENTERPRISES HEARING BEFORE THE COMMITTEE ON FINANCIAL SERVICES U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTH CONGRESS FIRST SESSION SEPTEMBER 25, 2003 Printed for the use of the Committee on Financial Services For sale by the Superintendent of Documents, U.S. Government Printing Office HOUSE COMMITTEE ON FINANCIAL SERVICES JAMES A. LEACH, Iowa MICHAEL G. OXLEY, Ohio, Chairman BARNEY FRANK, Massachusetts BRAD SHERMAN, California CHARLES A. GONZALEZ, Texas MICHAEL E. CAPUANO, Massachusetts JOSEPH CROWLEY, New York WM. LACY CLAY, Missouri STEVE ISRAEL, New York MIKE ROSS, Arkansas CAROLYN MCCARTHY, New York JOE BACA, California JIM MATHESON, Utah STEPHEN F. LYNCH, Massachusetts ARTUR DAVIS, Alabama RAHM EMANUEL, Illinois BRAD MILLER, North Carolina DAVID SCOTT, Georgia BERNARD SANDERS, Vermont Bartlett, Hon. Steve, President and CEO, The Financial Services Roundtable Conine, C. Kent, Conine Residential Group, Inc., on behalf of the National Courson, John, President and CEO, Pacific Mortgage Company, on behalf of the Mortgage Bankers Association of America Falcon, Hon. Armando Jr., Director, Federal Housing Enterprise Oversight Fishbein, Allen, Director of Housing and Credit Policy, Consumer Federation Korsmo, Hon. John T., Chairman, Federal Housing Finance Board Montague, Terri Y., President and Chief Operating Officer, The Enterprise Raines, Franklin D., Chairman and Chief Executive Officer, Fannie Mae Schultz, Dean, President and CEO, Federal Home Loan Bank of San Fran- Federal Home Loan Bank of Boston letter, September 24, 2003 Ney, Hon. Robert W.: 256 National Association of Realtors, prepared statement 257 Courson, John: Written response to questions from Hon. Ginny Brown-Waite Falcon, Hon. Armando Jr.: 261 Written response to questions from Hon. Ginny Brown-Waite Gould, George D.: Written response to questions from Hon. Ginny Brown-Waite Written response to questions from Hon. Ginny Brown-Waite 262 266 268 270 275 H.R. 2575-THE SECONDARY Thursday, September 25, 2003 U.S. HOUSE OF REPRESENTATIVES, Washington, D.C. The committee met, pursuant to call, at 10:10 a.m., in Room 2128, Rayburn House Office Building, Hon. Michael Oxley [chairman of the committee] presiding. Present: Representatives Oxley, Leach, Baker, Bachus, Castle, Royce, Lucas of Oklahoma, Ney, Kelly, Paul, Gillmor, Ryun, Ose, Green, Shays, Shadegg, Hart, Tiberi, Kennedy, Feeney, Hensarling, Garrett, Murphy, Brown-Waite, Barrett, Harris, Renzi, Frank, Kanjorski, Waters, Maloney, Carson, Sherman, Meeks, Lee, Inslee, Moore, Gonzalez, Lucas of Kentucky, Clay, Israel, Baca, Matheson, Miller of North Carolina, Scott, and Davis. The CHAIRMAN. [Presiding.] The committee will come to order. Today the Financial Services Committee will hear from the regulators, the regulated, and outside parties interested in the oversight of the housing government-sponsored enterprises. Two weeks ago, Secretaries Snow and Martinez came to the committee with the Administration's proposal to improve regulatory oversight for the GSES. They proposed developing a world-class regulator with the tools to rigorously supervise the activities of these highly complex financial institutions. The Secretaries called for the regulator to be housed in the Department of the Treasury as an individual office, similar to that of the Office of the Comptroller of the Currency. Additionally the proposal called for the Department of Housing and Urban Development to retain its role as regulator of the GSES' mission and to ensure that the agencies meet their affordable housing goals. HUD's expertise in this area is critical. Under the Administration's proposal the Department would receive additional powers to enforce compliance with the housing goals. There is a broad agreement that the current regulatory structure for the GSES is not operating as effectively as it should. The Office of Federal Housing Enterprise Oversight is underfunded, understaffed and unable to fully oversee the operations of these sophisticated enterprises. This was reflected in the surprise management reorganization by Freddie Mac and by Wall Street reports stating that GSE oversight |