The government regulator responsible for overseeing Fannie Mae and Freddie Mac will testify before the Senate Banking Committee next week as Republicans prepare to attempt the massive undertaking of overhauling the U.S. housing finance market.
The committee announced Wednesday evening that Federal Housing Finance Agency Director Mel Watt would appear before the panel May 11, for a hearing named “the Status of the Housing Finance System After Nine Years of Conservatorship.”
Conservatorship is the legal term for the government’s custody over the two mortgage buyers since they were bailed out during the financial crisis in 2008.
While Congress failed to pass legislation during the Obama years to resolve the status of the government-sponsored enterprises, Treasury Secretary Steven Mnuchin has repeatedly said it is a priority for him.
The Republican chairmen of the committees with oversight of Fannie and Freddie have expressed optimism about the prospects for reform with an engaged administration.
Mnuchin has been meeting regularly with Sen. Mike Crapo, the chairman of the Senate Banking Committee, and Rep. Jeb Hensarling, the chairman of the House Financial Services Committee, to discuss housing finance, among other matters.
While tax and financial regulatory reform are Mnuchin’s two top stated priorities, housing finance is next. Crapo last week suggested that in some respects working on Fannie and Freddie could be easier than changing the 2010 Dodd-Frank law.
Watt, an Obama appointee, has warned that Fannie and Freddie face political risk in the year ahead, thanks to a law that requires their capital to be steadily reduced to zero.
