Advertisement
YOU ARE HERE: LAT HomeCollections

Lawmaker Cites Harm in Talk of Fannie, Freddie

June 25, 2003|From Times Wire Services

A U.S. lawmaker seeking to tighten government oversight of the top two U.S. mortgage finance companies, Fannie Mae and Freddie Mac, said Tuesday that discussion of cutting government ties to the companies could rattle markets.

Rep. Richard H. Baker (R-La.) said he would introduce a bill to strengthen the way the government supervises the companies in the wake of Freddie Mac's clearing out of its top management over an accounting probe. But he said a debate over removing the benefits Congress grants the companies to help them promote homeownership could be harmful.

"The housing boom has been a major component of our slow economic growth and were we to engage in, say, a privatization discussion right now, I think that would be very disruptive to the markets," Baker said on CNBC.

Fannie Mae and Freddie Mac are shareholder-owned companies with congressional charters granting them advantages to help them make it easy for home buyers to obtain mortgages. The benefits include the ability to borrow billions from the government and some tax and disclosure exemptions.

Meanwhile, Peter Fisher, the Treasury undersecretary for domestic finance, said he was content with the increased disclosure steps taken by the two companies.

Baker said his goal is to give the companies' regulator, the Office of Federal Housing Oversight, more funds and powers to supervise the large companies that owned or had guaranteed 44% of the $6.7 trillion in U.S. mortgage debt as of late 2002.

Reuters and Bloomberg News were used in compiling this report.

Advertisement
Los Angeles Times Articles
|
|
|