Six senators call on housing regulator to let Congress finish housing finance reform

Six senators call on housing regulator to let Congress finish housing finance reform

A group of six bipartisan senators is urging a top housing regulator to leave an overhaul of the financing system to Congress.

Sen. Bob CorkerRobert (Bob) Phillips CorkerJeff Daniels blasts 'cowardice' of Senate Republicans against Trump Corker: 'I just don't' see path to challenge Trump in 2020 Ex-GOP Sen. Corker: Trump primary would be 'good thing for our country' MORE (R-Tenn.) along with five other senators, wrote a letter on Thursday to Federal Housing Finance Agency (FHFA) Director Mel Watt calling on him to refrain from making any policy changes that would remove mortgage giants Fannie Mae and Freddie Mac from government conservatorship without congressional input.


"Housing finance reform remains the last major piece of unfinished business of the financial crisis, and recapping and releasing Fannie and Freddie without reform would keep taxpayers on the hook for future bailouts,” said Corker, a member of the Senate Banking Committee.

“It is my hope that Director Watt will avoid any measures that would hinder the ability to pass bipartisan reform legislation in the future,” he said. 

Congress plans to re-engage on the issue in the coming months, with the likelihood of concrete action next year, the letter said.

So in the meantime, lawmakers are asking Watt to continue taking incremental steps to facilitate housing finance reform.

“Over the long run, we all agree changes will be needed to the existing structure,” the senators wrote.

“However, we firmly believe those changes should come through housing finance reform legislation, not unilateral action by this or any future administration,” they wrote.

Sens. Mike CrapoMichael (Mike) Dean CrapoTrump, Senate GOP discuss effort to overhaul legal immigration Dems propose fining credit agencies for data breaches Mueller fails to break stalemate on election meddling crackdown MORE (R-Idaho), Heidi HeitkampMary (Heidi) Kathryn HeitkampOn The Money: Stocks sink on Trump tariff threat | GOP caught off guard by new trade turmoil | Federal deficit grew 38 percent this fiscal year | Banks avoid taking position in Trump, Dem subpoena fight Fight over Trump's new NAFTA hits key stretch Former senators launching effort to help Dems win rural votes MORE (D-N.D.), Dean HellerDean Arthur HellerThis week: Barr back in hot seat over Mueller report Trump suggests Heller lost reelection bid because he was 'hostile' during 2016 presidential campaign Trump picks ex-oil lobbyist David Bernhardt for Interior secretary MORE (R-Nev.), Jon TesterJonathan (Jon) TesterGOP angst grows amid Trump trade war Overnight Defense — Presented by Huntington Ingalls Industries — Pentagon approves transfer of .5B to border wall | Dems blast move | House Dem pushes Pelosi to sue over Trump's Yemen veto Pentagon approves transfer of .5B to Trump border wall from Afghan forces, other accounts MORE (D-Mont.), and Mark WarnerMark Robert WarnerOvernight Defense: Congressional leaders receive classified briefing on Iran | Trump on war: 'I hope not' | Key Republican calls threats credible | Warren plan targets corporate influence at Pentagon Key Republican 'convinced' Iran threats are credible Hillicon Valley: Trump takes flak for not joining anti-extremism pact | Phone carriers largely end sharing of location data | Huawei pushes back on ban | Florida lawmakers demand to learn counties hacked by Russians | Feds bust 0M cybercrime group MORE (D-Va.) signed onto the letter.

In the past couple of months, there has been a push from some in the banking community to let Fannie and Freddie recapitalize their profits to create a buffer against any shocks down the road.  

But some housing industry experts have argued that any attempt by Watt to recapitalize Fannie and Freddie would create a congressional backlash that could threaten the stability of the mortgage giants.

In 2013, Corker, Warner, and a bipartisan group of senators introduced legislation that would replace Fannie and Freddie with a privately capitalized system that preserves mortgage products such as the 30-year loan and protects taxpayers from future economic downturns.

In December, Corker, Warner, and Sens. David VitterDavid Bruce VitterSenate confirms Trump judge who faced scrutiny over abortion views Collins votes against Trump judicial pick Progressive group targets Susan Collins over Trump judicial pick MORE (R-La.) and Elizabeth WarrenElizabeth Ann WarrenThe Memo: Trump faces steep climb to reelection Feehery: A whole new season of 'Game of Thrones' Overnight Energy: Warren wants Dems to hold climate-focused debate | Klobuchar joins candidates rejecting fossil fuel money | 2020 contender Bennet offers climate plan MORE (D-Mass.), added a provision into the fiscal 2016 appropriations package that prohibits for at least two years the sale of Treasury-owned senior preferred shares of Fannie and Freddie without congressional approval.

"The passage of this provision reasserted the desire of Congress to have a say in determining the fate of Fannie and Freddie," the senators wrote in the letter.

Fannie and Freddie needed about $188 billion in taxpayer funding to stay afloat during the financial crisis in 2008.