Lawmakers on both sides of the aisle and both chambers of Congress are warming up the hot seat next week for the man in charge of the conservatorships of Fannie Mae and Freddie Mac as they demand answers following the firestorm surrounding bonus payments for top GSE executives.In advance of what is expected to be a heated set of hearings, Federal Housing Finance Agency Acting Director Edward DeMarco dispatched a letter to lawmakers late this week to provide his perspective after approving $12.8 million in bonuses for 10 Fannie and Freddie executives.

A bill introduced in the Senate this week would “responsibly unwind” Fannie Mae and Freddie Mac and “end the dependence on the government for housing finance.” Sen. Bob Corker, R-TN, said he introduced the Residential Mortgage Market Privatization and Standardization Act to start a conversation on how to best to rebuild the mortgage finance market.

Any proposed restrictions on asset-backed securities issuers, real estate investment trusts and other mortgage-related pools under the Investment Company Act would be harmful to the market and further restrict liquidity and capital formation, warned stakeholders. In comments to the Securities and Exchange Commission’s possible amendments to Rule 3a-7 and Section 3(c)(5) of the ICA, most stakeholders noted that the two provisions have worked well through the years to distinguish asset-backed issuers from investment companies, address investor protection concerns and allow the growth and innovation of...

The U.S. Supreme Court will determine whether disparate impact claims can be applied to the Fair Housing Act and lending discrimination cases by reviewing a Minnesota case involving rental housing. Although many fair lending cases based on disparate impact have been brought and settled over the years, the standard has not been universally interpreted by federal appeals courts. In Magner v. Gallagher, private landlords sued the city of St. Paul, MN, for enforcing its housing code, leading to claims by the landlords that shutting down their properties made it too difficult for minority renters to find...

The proposed bill that would increase standardization and uniformity in the mortgage securities market – without Fannie Mae or Freddie Mac – contains many worthy components, but it needs more details and further tweaking, according to industry experts testifying at a House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises hearing this week. The Private Mortgage Market Investment Act, drafted by Subcommittee Chairman Scott Garrett, R-NJ, would create a heavily regulated mortgage-backed securities market made up solely of private entities that would function with no federal...

Raj Date, special adviser to the Treasury and the acting head of the Consumer Financial Protection Bureau, ran headlong into considerable resistance from Republicans on a House subcommittee this week over the scope of the bureau’s authority and its effectiveness, especially in relation to the mortgage lending activities of community banks. Date was the sole witness to appear before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit this week as it reviewed the first 100 days of the CFPB. Rep. Donald Manzullo, R-IL, put it most forcefully for the GOP opposition when he...

Industry observers are warily eying the potential impact of a bill unveiled last week by a senior House Republican that aims to encourage private capital into the residential mortgage secondary market without the need for Fannie Mae or Freddie Mac. The Private Mortgage Market Investment Act, drafted by Rep. Scott Garrett, R-NJ, would create a heavily regulated mortgage-backed securities market made up solely of private entities that would function with no federal guarantee at all. Garrett, who chairs the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, said his proposal will...

The chairman of the House subcommittee that oversees the GSEs unveiled a bill late this week that seeks to drastically overhaul the secondary mortgage market – without the need for Fannie Mae or Freddie Mac.The Private Mortgage Market Act would create a heavily regulated mortgage-backed securities market consisting strictly of private entities functioning without a federal guarantee, according to Rep. Scott Garrett, R-NJ.Garrett, who chairs the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, said the goal of his legislation is to facilitate continued standardization and uniformity, ensure rule of law and provide MBS investors with the necessary transparency and standardization to ensure “that a deep and liquid market develops” without Fannie and Freddie.

The 12 member “super committee” of House and Senate members tasked with tackling debt reduction should seriously consider raising the guarantee fees charged by Fannie Mae and Freddie Mac as one way to reduce government expenditures, according to the chairman of the House Financial Services Committee. In a letter to the members of the Joint Select Committee to Reduce the Deficit, Rep. Spencer Bachus, R-AL, said the committee should consider raising the premiums the GSEs charge lenders to insure against the risk that borrowers will fail to repay their loans to something even higher than the White House and regulators have proposed.

The mortgage lending industry is more likely to see a return to higher FHA loan limits than higher Fannie Mae and Freddie Mac limits, after the Senate gave its approval to legislation that would restore higher conforming loan levels all the way around, according to one top industry lobbyist. Late last week, the Senate voted 60-38 to approve a federal spending bill that included an amendment sponsored by Sens. Bob Menendez, D-NJ, and Johnny Isakson, R-GA, that would reinstate the higher loan limits for the government-sponsored enterprises and the FHA that ended on Sept. 30. Those limits dropped from a maximum of...