Fannie Mae Eyes New Role

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WASHINGTON - (01/16/06) – A plan by Fannie Mae to make asmuch as $10 billion in home construction loans over the next 10years is expected to fuel a new round of debate in Congress overthe proper role of the secondary mortgage market giant. AlthoughFannie first announced the plan two years ago as part of anaffordable-housing initiative, remarks made by the company’sCEO Daniel Mudd at the annual National Association of Home Buildersconference last week prompted new concerns by banks and otherlenders about so-called mission creep by the government sponsoredenterprise. Critics claim the perceived government ties of thefinance giant give it an advantage in borrowing markets. The issueis expected to surface with the return of Congress later this monthand the renewal of the debate over tightening regulations of theGSEs.

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