GSE Bill: Path Clears in Senate, But Then What?

Submitted by Ronald Tennant with Metrocities Mortgage:
American Banker (05/21/08) P. 1; Kaper, Stacy; Sloan, Steven
Although the Senate Banking Committee passed a bill that enhances oversight of the government-sponsored enterprises by creating a new regulator, the legislation has a long way to go before it is finalized. House Financial Services Committee Chairman Barney Frank, D-Mass., is concerned that the measure differs from the version passed by his chamber in that it permanently creates an affordable housing fund; but instead of earmarking funds the first year to help victims of Hurricane Katrina, the Senate version would tap the money to pay for an FHA program that would refinance mortgages with balances exceeding home values after they are written down to 87 percent of the current market value. Additionally, the Senate version would permanently boost the conforming loan limit to $550,000, versus the House cap of $729,750. Observers say the Senate version has the greatest chance of passage, however, because it has bipartisan support and is favored by the Bush administration. They note that getting Sen. Richard Shelby, R-Ala., the committee's top-ranking Republican, on board was a difficult task and that Shelby will not make additional concessions.