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U.S. Representative ""Judy Biggert (R-Illinois)"":http://judybiggert.house.gov introduced new legislation Thursday designed to ramp up congressional oversight of the government-controlled mortgage giants ""Fannie Mae"":http://www.fanniemae.com and ""Freddie Mac"":http://www.freddiemac.com and disclose the intricacies of the two companies' businesses to taxpayers.
[IMAGE]In the midst of the industry's housing crisis and the nation's financial meltdown, taxpayers were forced to take on the costs and risks associated with the GSEs, including an estimated outlay of $291 billion last year alone, according to the Congressional Budget Office.
Biggert, the ranking GOP member of the House Financial Services Subcommittee on Oversight and Investigations, said she introduced the bill to improve transparency and accountability within the GSEs.
""These institutions have over eight trillion dollars in outstanding securities â€" about half the nation's mortgages,"" said Biggert. ""It is inconceivable that officials managing these liabilities would be allowed to do so without proper transparency, independent oversight, and thorough reporting to Congress and the American people.""
Biggert says Fannie Mae and Freddie Mac played a central role in the housing collapse, and continue to function only because of federal support. She said, ""Taxpayers deserve to know where their dollars are going, what risks they are being exposed to, and how these institutions are being managed or mismanaged.""
[COLUMN_BREAK]The Fannie Mae and Freddie Mac Accountability and Transparency for Taxpayers Act of 2010 (FFATT Act), or H.R. 4581, would require the GSE inspector general or another supervisor to submit regular reports to Congress outlining taxpayer liabilities, investment decisions, and management details of Fannie and Freddie.
As stipulated by the proposed legislation, the reports would include explanations of the GSE's activities related to executive bonuses, foreclosure mitigation, fraud prevention, investments, securities, stock, capital levels, and mortgage criteria. The bill also requires that these reports, along with a system to report waste, fraud, or abuse, be made publically available.
""The taxpayers now own 80 percent of Fannie Mae and Freddie Mac after all the bailouts, and the tab continues to grow,"" said Rep. Randy Neugebauer (R-Texas), deputy ranking member of the Financial Services Committee and a co-sponsor of the bill. ""The FFATT Act is a step in the right direction and will provide the taxpayers and Congress with more information about the status and actions of Fannie and Freddie.""
The FFATT Act is intended to complement a related measure, H.R. 4450, introduced on January 14th by Biggert and Rep. Dennis Moore (D-Kansas), which would establish an independent inspector general within the ""Federal Housing Finance Agency"":http://www.fhfa.gov (FHFA) to monitor the GSEs. Biggert says she hopes to integrate the two bills into one as they move through the Financial Services Committee or pass them separately in the coming months.
The debate over the future of Fannie Mae and Freddie Mac is already picking up speed in Washington. Rep. Barney Frank (D-Massachusetts) said Thursday that he plans to hold a hearing on March 2 to examine the housing finance industry and the role of the government in supporting the mortgage market, in particular Fannie and Freddie.
The acting director of the GSEs' regulator, Edward DeMarco of the FHFA, acknowledged in the letter to lawmakers ""earlier this week"":http://dsnews.comarticles/no-new-loan-products-or-interest-rate-initiatives-for-gses-fhfa-2010-02-03 that the ""enterprises' operating in conservatorship cannot be a long-term solution.""
