CHICAGO Oct 10 A senior Republican in the U.S.
House of Representatives said on Monday it may be appropriate
for the government to maintain some role in supporting the
housing market in the future, but only a limited one.
"As we consider where our mortgage market is in the future,
there may be a role for the government," Representative Spencer
Bachus, the chairman of the House Financial Services Committee,
told the Mortgage Bankers Association.
Still, Bachus, who has helped lead a Republican effort to
eliminate taxpayer support for mortgage finance giants Fannie
Mae and Freddie Mac , said it was important
to reduce the government's footprint in housing finance.
"We should be stepping out of the way and allowing the
private market to take over with as limited a number of
regulations and restrictions as possible," he said.
Democrats and Republicans alike agree the U.S. system of
housing finance needs to be revamped. They disagree on the
extent to which government support should be maintained.
Currently, through Fannie Mae, Freddie Mac and the Federal
Housing Administration, the government backs about 90 percent
of all new mortgages. The level of future government support
will be determined by legislative changes that could take years
In February, the Obama administration outlined three
potential approaches to revamping housing finance, ranging from
privatizing the system to limiting government-guaranteed
mortgages to low and moderate income borrowers.
On Thursday, U.S. Treasury Secretary Timothy Geithner said
the administration was considering a new set of legislative
ideas to try to jump-start debate on shrinking the government's
"I don't know what will be possible in terms of
legislating in the next 18 months or so. We would like to get
that process moving," he said without offering a timeline on
how quickly the administration might move.
Policymakers are wary of moving too quickly to withdraw
government support given the housing sector's extreme weakness.
The administration has been pushing Fannie Mae and Freddie
Mac's regulator to take steps to make it easier for struggling
borrowers to refinance their mortgages.
Bachus took note of the weakness of the U.S. housing market
and said he would not interfere with new policies under
consideration, nor would he use obstructionist politics if
there was an increased momentum to fix the housing market.
"I will not let ideology detract of any reasonable attempt
of the government to play a positive role," he said. "We aren't
going to get out of this until the housing market recovers,"
Bachus added, referring to the sluggishness of the overall