Treasury Aide Mum on Goal For Freddie, Fannie Capital
WASHINGTON - Despite presure from lawmakers, Treasury Under Secretary Robert R. Glauber refused last week to say how low a capital level the administration could tolerate for the government-sponsored agencies that support the secondary housing market.
The Bush administration is supporting higher capital requirements for the federally chartered mortgage agencies than are called for in a competing bill sponsored by the House Banking Committee's chairman, Henry B. Gonzalez.
Concern by Gonzales
Rep. Gonzales is concerned that higher capital standards would increase the cost of motgage loans.
David Jeffers, vice president of corporate relations for the Federal National Mortgage Association, or Fannie Mae, echoed the subcommittee's frustration at the lack of answers.
"For over two years, the Treasury has avoided giving us a number or even range for capital," said Mr. Jeffers.
In testimony Thursday, Mr. Glauber contended that the additional capital sought by the Treasury could be taken from he agencies's substantial profits, rather than from homebuyers.
"We do not have to choose between protecting the taxpayer and protecting the homebuyer," he said.
Although Fannie Mae and the Federal Home Loan Mortgage Corp., or Freddie Mac, are highly profitable, the administration and some members of Congress are concerned that they are too thinly capitalized to survice a setback in the market. Both Fannie and Freddie favor the Gonzalez bill.
Ms. Healy writes for the Medill News Service.