The future of Fannie Mae and Freddie Mac were the subject of testimony on Capitol Hill Wednesday before the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises.
Congressman Paul E. Kanjorski (D-PA), the subcommittee’s chairman, convened the hearing to “focus on the many strategies that Fannie Mae, Freddie Mac, the Federal Housing Finance Agency, and the Treasury Department have employed to limit capital infusions into the two housing enterprises.”
Kanjorski noted in his opening remarks that in order to stabilize the U.S. housing markets, the Treasury Department has to date purchased or announced plans to buy just under $150 billion in the senior preferred stock of the enterprises combined. Moreover, according to a June report issued by the Federal Housing Finance Agency, the Treasury Department and the Federal Reserve have together purchased $1.36 trillion in the mortgage-backed securities of the two institutions.
“Some of my colleagues may try to use today’s hearing as an opportunity for political grandstanding. They, however, need to remember that people who live in glass houses should not cast stones,” Kanjorski cautioned. “Under the leadership of former Chairman Mike Oxley, we tried for several years to enact bipartisan legislation to improve the regulation and activities of Fannie Mae and Freddie Mac. Unfortunately, many Republicans in Congress and officials in the Bush Administration blocked these efforts. Their delays allowed the housing crisis to fester into an ulcer.”