Nicolas P. Retsinas, federal housing commissioner and HUD assistant secretary for housing, has emerged as the point man in the federal government's politically sensitive efforts to push Fannie Mae and Freddie Mac to increase their business to underserved borrowers.

He is the first agency regulator to have at his disposal a comprehensive regulatory framework that Congress passed almost two years ago. It requires the two government-sponsored agencies to meet specific loan targets for lower-income and inner-city borrowers.

The department has also begun to review the agencies' underwriting guidelines for bias.

American Banker talked to Mr. Retsinas about these ventures earlier this week.

Q.: How do you see your role as regulator of Fannie Mae and Freddie Mac?

RETSINAS: I see our role as regulators as [having] really two or three dimensions.

One, to ensure that the standards set forth by Congress are adhered to, and if not, why not.

Second, helping set what those standards are in the future.

Three, to open the window, so everyone knows what is being done, what is not being done; whether the goals are being met, whether they are not being met.

Q.: Are you planning to increase the lower-income and inner-city lending goals for the agencies?

RETSINAS: Given the need, given the depth and the width of the need for affordable housing, we always want people and organizations to do more because more needs to be done.

What we need to do is balance that with what is reasonable. And I have every reason to believe that both of the GSEs [government-sponsored enterprises] want to do more.

Of course the information [on their performance] will be the ultimate sort of test.

Q.: You testified before the House Banking Committee that the GSEs should raise their levels of minority business. What would it take to do that?

RETSINAS: What we said was, if you look at the statistics, the GSEs are performing in terms of minority lending like the industry as a whole.

We're saying that it's appropriate in an era where fair lending is a very significant public policy issue, that the GSEs assume more leadership.

Q.: Earlier this year, you told Fannie Mae and Freddie Mac that they should lower their loan limits to match a 3% decrease in the index to which they are tied. A few days later you backed off. What happened?

RETSINAS: I disagree. Our follow-up letter said that while we believe an index is an index is an index, we wanted to make it clear that we did not say at the outset...that we had regulatory authority over that.

We made our position clear and Fannie and Freddie decided to do otherwise.

Q.: You weren't pressured to back down.

RETSINAS: I certainly wasn't

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