Committees in the U.S. Senate and House of Representatives have adopted bills that would modify the regulation of Fannie Mae and Freddie Mac, and both houses could act upon these bills in the fall. The most controversial element of the proposed legislation is a provision in the Senate committee bill (S 190) that would reduce the size of the GSEs’ portfolios of mortgages and mortgage-backed securities. Fannie and Freddie contend that limiting or reducing their portfolios will adversely affect the residential mortgage markets, especially interest rates; others argue the change will have no adverse effect on interest rates and will reduce the risk the companies create for taxpayers and the economy in general. This conference will address this issue and the prospects for the legislation this year.
