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Response to written questions of:

Senator Shelby

Senator Hagel

Senator Reed

Allen J. Fishbein, Director for Housing and Credit Policy, Consumer Federa-

tion of America, on behalf of National Association of Consumer Advocates,

National Community Reinvestment Coalition, National Congress for Com-

munity Economic Development, National Fair Housing Alliance, and Con-

sumer Federation of America

Prepared statement

Robert M. Couch, Chairman, Mortgage Bankers Association

Prepared statement

Response to written questions of:

Senator Shelby

Senator Hagel

Iona C. Harrison, Realty Executives-Main Street, U.S.A., on behalf of the

National Association of REALTORS®

Prepared statement

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PROPOSALS FOR IMPROVING THE

REGULATION OF THE HOUSING GOVERNMENT SPONSORED ENTERPRISES

THURSDAY, OCTOBER 16, 2003

U.S. SENATE,
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS,

Washington, DC. The Committee met at 10:12 a.m., in room SD-538, Dirksen Senate Office Building, Senator Richard C. Shelby (Chairman of the Committee) presiding.

OPENING STATEMENT OF CHAIRMAN RICHARD C. SHELBY Chairman SHELBY. The hearing will come to order.

I would first like to welcome Treasury Secretary Snow and HUD Secretary Martinez again to the Committee. They are no strangers here. It is a pleasure to have both of you back. That will be our first panel.

Our second panel of witnesses will be Franklin Raines, Chairman and Chief Executive Officer of Fannie Mae; George D. Gould, Director of Freddie Mac; and Norman Rice, President and CEO of the Federal Home Loan Bank of Seattle.

Today's hearing focuses upon a very important topic: improving the regulation of the housing Government Sponsored Enterprises, or GSE's, as they are commonly known.

The mission of the housing ĞSE's is one I strongly support. Federal Home Loan Bank advances are a vital link to the capital markets for financial institutions nationwide. The secondary mortgage market access that Fannie Mae and Freddie Mac provide also serves as an important source of liquidity for our Nation's mortgage market. By enhancing liquidity, the Enterprises make possible the lending activity that is critical to economic growth and to expanding homeownership.

The enterprises are large institutions. Collectively, Fannie Mae and Freddie Mac carry $1.6 trillion in assets on their_balance sheets and have outstanding debt of almost $1.5 trillion. The Federal Home Loan Bank System is not far behind, with combined assets of over $780 billion and outstanding advances to member institutions of $495 billion.

Due to the importance of the housing GSEs' mission and the size of the assets, I believe that the Enterprises require a strong, credible regulator. I remain concerned that the current regulatory structure for the housing GSE's is neither strong nor credible.

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