Republican senators expressed concern Tuesday about a deal cut among Fannie Mae, Freddie Mac, and New York Attorney General Andrew Cuomo that would establish appraisal standards for any lender selling to the government-sponsored enterprises.
Sen. Elizabeth Dole, R-N.C., however, did not offer an amendment she had drafted that would have effectively upended the agreement by specifying that appraisal rules must be set at the federal, not state, level.
Industry groups had backed the amendment, which they wanted included in a bill designed to stop the home foreclosure crisis. The Senate Banking Committee approved the bill Tuesday (See related story on page 1) but never considered the appraisal amendment.
Still, Sen. Dole said she wanted to continue looking at the issue, and she was seconded by Sen. Richard Shelby, the panel's lead Republican.
The Alabama Republican said he was concerned that the Cuomo agreement would set standards nationwide —and added that the banking panel should examine them carefully.
"It is the banking committee's role to examine any rules," Sen. Shelby said. "We cannot assume that a standard of rules will work."
Sen. Charles Schumer, D-N.Y., defended his state's attorney general and said Mr. Cuomo acted when others would not.
"There was no regulation," Sen. Schumer said. "He stepped into a void. He is going to look at this very carefully … . I don't want to supplant what the attorney general is doing."
He was backed by Chairman Chris Dodd, who said the appraisal agreement should not be undone without first establishing an alternate set of appraisal guidelines.
"In the absence of standards taken by attorney general, we would have no standards at all," he said.
