* WASHINGTON (9/12/08)--House Financial Services Chairman Barney Frank (D-Mass.) is looking to bring back two programs--one that would allow sellers to help borrowers in the Federal Housing Administration’s (FHA) mortgage insurance program with downpayment assistance, and another to allow FHA premiums to be priced based on borrowers’ risk (CongressDailyPM
Sept. 10). The programs were killed earlier during housing bill talks. Rep. Al Green (D-Texas) has sponsored a bill to allow the FHA program to apply to those with credit scores of 680 or higher. Those with scores of 620 would pay a premium to participate. Green said the bill is needed to help with the housing crisis. Reps. Christopher Shays (R-Conn.) and Gary Miller (R-Calif.) have co-sponsored Green’s bill ... * WASHINGTON (9/12/08)--Sen. John Cornyn (R-Texas) has called for an investigation of mortgage giants Fannie Mae and Freddie Mac, citing a 2006 report indicating that Fannie had overstated earnings. He sent a letter to the Justice Department asking it to determine if any illegal activities have taken place. Fannie and Freddie were placed into conservatorship Sept. 7 (CongressDailyPM
Sept. 10) ... * WASHINGTON (9/12/08)--Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Charles Grassley (R-Iowa), House Ways and Means Chairman Charles Rangel (D-N.Y.), and House Financial Services Committee Members Paul Kanjorski (D-Pa.) and Mike Capuano (D-Mass.) have called for oversight of pension investments in hedge funds and private equity. The legislators supported the recommendations of a recent Government Accountability Office report
, which suggests that the secretary of labor should provide more guidance for investments in hedge and equity funds by pension plans. “This new investment strategy has not been tested in an unstable market,” Baucus said. “If the pension investments sour, the retirement savings of millions of Americans could suffer” ... * WASHINGTON (9/12/08)--A Senate subcommittee report released Wednesday indicates that several Wall Street investment banks are using marketing schemes such as “dividend uplift” or “dividend enhancement” that help foreign investors avoid dividend taxes. The report, by the Senate Permanent Subcommittee on Investigations, cites Morgan Stanley, Lehman Brothers, Merrill Lynch, Deutsche Bank, Citigroup and UBS (The New York Times
Sept. 11). Hedge funds, such as Maverick Capital, Moore Capital and Highbridge also were noted as using the dividend avoidance products. The schemes have been used for at least the last 10 years, according to the report. Foreign investors generally owe 30% tax on dividends ...