The National Association of Home Builders created waves in banking lobbying circles late last month when Chief Executive Officer Jerry Howard denounced the principal House bill on Fannie Mae and Freddie Mac reform at a closed-door meeting among top trade-association officials.
Although the homebuilders’ opposition to parts of the reform measure is well-established, Howard made unusually vehement comments about the bill and its authors, Rep. Richard Baker (R-La.) and House Financial Services Chairman Michael Oxley (R-Ohio), at a regular strategy session of top executives from the American Bankers Association, the National Association of Realtors, the National Association of Mortgage Bankers and America’s Community Bankers, said several sources with knowledge of the meeting.
A spokesman for the homebuilders said that the group could not comment on the meeting or discuss its concerns about the bill in general.
“Given the speculation and rumors flying around, we’re not commenting on anything right now,” spokesman Paul Lopez said.
The House Financial Services Committee is expected to mark up the bill May 25.
The reform bill would create a new regulator to keep tabs on Freddie, Fannie and the 12 Federal Home Loan Banks. Congress began contemplating a new regulator for the mortgage financiers after both Freddie and Fannie faced much-publicized accounting scandals.
In the past, the homebuilders have been worried that lawmakers would put caps on the size of the portfolios held by government-sponsored enterprises (GSEs) such as Freddie and Fannie. The homebuilders argue that such a move would have a bad impact on their own business. They have also been concerned that the mortgage giants might be too quick to make concessions to lawmakers.
Howard brought up those concerns again at the trade group’s meeting, an attendee said.
“Jerry Howard has a gift for stating his opinion colorfully and forcefully. Through experience, I discount it about 50 percent,” the attendee said, adding, “I do think it has cost them [the homebuilders] a little discomfort.”
Several lobbyists said that the homebuilders’ chief lobbyist, Joe Stanton, had been doing “damage control” on the Hill since Howard made the remarks.
The homebuilders’ political action committee gave generously to Oxley and Baker in the 2004 election cycle — $10,000 to Oxley and $7,500 to Baker — but so far has given nothing this year.
It is unclear whether Howard’s comments will hurt the homebuilders’ position regarding the Fannie and Freddie reform bill, as rival lobbyists are no doubt hoping, or whether their long-standing opposition to the bill has already lessened their bargaining power.
“They [the homebuilders] have been so far out on this that they aren’t relevant,” a House GOP aide said. “They’ve been acting like it is two years ago and we’re talking about GSE reform. Everyone else realizes that it’s today and we are working in a narrower area” with a specific proposal already on the table.
Howard joined the National Association of Home Builders in 1988 and became CEO in 2001.
Trade groups in banking and real estate have been jostling for months to gain the upper hand in negotiations with the Financial Services Committee. Several proposals, such as the so-called “bright line,” which would establish a firm boundary between primary and secondary mortgage markets, have created divisions among trade groups.