WASHGINTON Sen. Mike Crapo, the top Republican on the Senate Banking Committee, said Tuesday that he hopes the panel will begin debate on overhauling the mortgage finance reform legislation this fall.
The Idaho Republican said he expects the committee will first work on a standalone bill to fix the Federal Housing Administration before delving into broader reform of government-sponsored enterprises Fannie Mae and Freddie Mac.
"Right now, in my discussions with [Sen. Tim Johnson, chairman of the panel], we are going to move ahead with an FHA reform bill first that will not expand into Fannie and Freddie," Crapo told industry participants at a regulatory conference in Washington, D.C., hosted by the Securities Industry and Financial Markets Association and the Clearing House. "But following that, we will move on to a GSE reform bill."
A bipartisan group of senators on the banking panel is already said to be working on mortgage finance legislation that could be unveiled in coming weeks. Crapo referenced several ongoing efforts by lawmakers during his remarks, though he did not detail any by name. He also reiterated his interest in moving the market back into the private sector, while conceding that the government may need to provide some form of a guarantee.
"I'm one of those who would like to see it moved entirely into the private sector," he said. "I understand, however, that there is a very strong argument being made that, at whatever level of transition into the private sector that we achieve, there needs to be a government guarantee in place at some point to allow the markets to work, or we will jeopardize the ability to have the 30-year fixed-rate mortgages and other aspects of our housing system."
Crapo added that the Obama administration is working on its own reform plan. The Treasury Department released a white paper two years ago outlining several possible options for the mortgage finance system, but has yet to weigh in on a specific path.
"We are not directly engaged in negotiating with the administration on that at this time," Crapo said. "It is my understanding that [within] the administration itself, particularly at Treasury, there is an effort underway to put a serious proposal on the table, but we haven't seen that yet."
Analysts have suggested the GOP could hold up the president's nomination of Rep. Mel Watt, D-N.C., to head the Federal Housing Finance Agency, unless the administration releases a more detailed plan.