As Congress returns from its August recess, federal officials will update lawmakers this week on the state of the government-sponsored enterprises (GSEs). The House Financial Services Subcommittee on Capital Markets will hold a hearing on Fannie Mae, Freddie Mac and the Federal Home Loan Banks Wednesday at 9:30 a.m. EDT.
Michael S. Barr, the U.S. Treasury Department's assistant secretary for financial institutions and rumored candidate for the post of Consumer Financial Protection Bureau chief, will testify, as will Edward J. DeMarco, acting director of the Federal Housing Finance Agency (FHFA).
The Financial Services Committee and Capital Markets Subcommittee have held five hearings on housing finance this year.
Last month, three Democrat members of the subcommittee, including its chairman, Rep. Paul Kanjorski, D-Pa., wrote to President Obama asking that any new director of the FHFA aggressively pursue claims on behalf of Fannie Mae and Freddie Mac.
‘In winding down Fannie Mae and Freddie Mac, we must carefully craft a solution that stabilizes our mortgage markets and ensures the continued availability of reasonably priced loans and affordable housing opportunities for all Americans,’ Kanjorski said in a statement last month. ‘Simultaneously, FHFA must continue its efforts to protect taxpayers by recouping funds from the underwriters of faulty mortgages and the issuers of underwater securities purchased by Fannie Mae and Freddie Mac.’
Rep. Scott Garrett, the subcommittee's ranking member, has accused the Obama administration and congressional Democrats of hiding the true costs associated with the GSEs. He argues the GSEs should be accounted for in the federal budget, Garrett says.
‘With the taxpayers as the $10 trillion backstop for these government-controlled misfits, there should be a significant drive in Congress to reform them and reduce the risk to the public,’ Garrett wrote in a June 22 op-ed published in the New York Post.