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NAR Testifies on GSE Reform Bills.

WASHINGTON -- The National Association of Realtors(R) (NAR) told the U.S. Senate Banking Committee today that Realtors(R) support a strong, independent regulatory structure for Fannie Mae, Freddie Mac and the Federal Home Loan Banks, but oppose proposals that would weaken their housing mission or undermine the federal role in financing homeownership. E[acute accent]NAR President Al Mansell urged Congress to revise provisions in recent government-sponsored enterprise (GSE) reform bills that would delay program and product approval, create a rigid line of distinction between mortgage origination and secondary mortgage activities, and establish statutory portfolio limits. E[acute accent]"We believe that several current proposals could reach beyond safety and soundness regulation and diminish the housing mission of the GSEs," said Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City. "NAR opposes this overreaching and contends that allowing these provisions to pass could undermine the continued evolution of this robust housing market." E[acute accent]Realtors(R) believe that the new GSE regulator should have the authority to wind down the operations of a financially unstable enterprise through a conservator or receiver. NAR also believes the regulator should have the authority to set capital levels, to approve new programs and products, and to refine affordable housing goals as needed. E[acute accent]NAR agrees that the GSEs should be required to provide written notice to the regulator of new programs so that adequate safety, soundness and mission review can be accomplished. However, Realtors(R) oppose legislation that would subject every new GSE activity to an extended regulatory public comment process. NAR suggests that the time limit on decision-making by the regulator be shortened to 30 days with a 15 day extension if the regulator asks for additional information. E[acute accent]"We believe a measured approach to product approval is needed to protect market innovation and programs that help more Americans achieve the dream of homeownership," Mansell testified. E[acute accent]NAR believes that from a safety and soundness perspective, there is no need to create a so-called "bright-line" test or definition of the mortgage market. The bright-line proposal could hinder financing innovations associated with automated underwriting programs, affordable housing initiatives, and consumer education and outreach efforts. E[acute accent]"The bright-line test would preclude many of the GSEs' existing products and activities that were designed solely to increase access to mortgage credit, lower the costs of homeownership and foster innovations in home financing. This arbitrary hard line would also impair the ability of the regulator and market players to adapt to changing markets," Mansell explained. E[acute accent]Finally, Realtors(R) believe the authority to regulate the GSEs' portfolios should be governed by true safety and soundness principles. However, NAR opposes creating rigid statutory limits on portfolios. E[acute accent]"NAR believes that portfolio limits should be regulated from a risk perspective, but opposes statutory limits for the sake of shrinking the GSE mission. We ask that Congress add safeguards to ensure that there are no artificial portfolio limits that weaken the GSEs' housing mission," Mansell testified. E[acute accent]"We believe that GSE reform must strengthen our highly-acclaimed housing finance system, not weaken it. Regulatory reform must not become a reason or justification for reinventing the GSEs' housing mission," Mansell said. "NAR pledges to work with Congress and the administration to move the GSE reform debate forward in a way that protects the vibrancy, liquidity and evolution of the housing finance system."

E[acute accent]The National Association of Realtors(R), "The Voice for Real Estate," is America's largest trade association, representing more than one million members involved in all aspects of the residential and commercial real estate industries. E[acute accent]Information about NAR is available at http://www.realtor.org. This and other news releases are posted in the Web site's "News Media" section in the NAR Media Center. E[acute accent]REALTOR(R) is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS(R) and subscribe to its strict Code of Ethics.
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Publication:Business Wire
Date:Apr 19, 2005
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