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Housing reform spotlighted in Senate House
WASHINGTON (3/30/11)—The Senate Banking Committee “needs to do its homework” and should “thoroughly examine federal housing policy” and identify problems within the current system “before Congress can consider legislation,” committee ranking minority member Richard Shelby said. Shelby made his remarks before a Tuesday Senate Banking Committee hearing titled, Public Proposals for the Future of the Housing Finance System,” one of a series on that topic scheduled by the banking panel. The Republican from Alabama said that without proper examination, the committee could “yield to the temptation of picking a solution before it has accurately described the problem. “Legislation should be driven by facts, not by pre-determined outcomes,” he added. Shelby suggested that the committee “establish a formal process for considering housing finance reform,” a process that could include investigative hearings, hearings on various reform proposals, and, finally, the act of crafting legislation. Shelby said that following this approach would help committee members make informed decisions and could ensure that any legislation is bipartisan, effective, and “has the fewest unintended consequences.” The committee chairman, Sen. Tim Johnson (D-S.D), said at an earlier hearing on housing finance reform, “We must find workable solutions that protect current homeowners and preserve the option of responsible homeownership for future buyers.” Witnesses at the hearing included Michael Berman, chairman of the Mortgage Bankers Association, Dr. Arnold Kling, member, Mercatus Center Financial Markets Working Group, George Mason University; Dr. Mark Zandi, chief economist, Moody's Analytics, and Janneke Ratcliff, senior fellow, Center for American Progress. The testimony overall, very generally speaking, called upon Congress for tough reforms in the country's housing policy, but the reforms recommended were divergent. On the House side, the Financial Services Committee Tuesday moved ahead with its own housing-related legislation, introducing eight separate bills aimed at reforming government-sponsored mortgage entities Fannie Mae and Freddie Mac. One bill introduced by Rep. Ed Royce (R-Calif.) would, according to Royce, “remove the congressional mandate placed on the GSEs requiring them to dedicate a portion of their business to affordable housing” to “scale back the disproportionate level of government intervention in the housing market." A markup session on GSE-related legislation will be held in the House Financial Services Committee next Tuesday, Politico has reported.
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