The Paulson pushed GSE reform bill known as the Housing Economic Recovery Act of 2008 (H.R. 3221) which earlier this week passed the House has now passed the Senate becoming law with the President’s signature which he already pledged to give by the end of July. I first read about the Senate passage in a OFHEO press release.

The press release from the Office of Federal Housing Enterprise Oversight, the current regulator of the GSEs, Fannie Mae and Freddie Mac said in a release dated today July 26, 2008:

Statement of OFHEO Director James B. Lockhart

“I congratulate and thank Members of the House and Senate on final passage of a sound and comprehensive GSE regulatory reform bill. These provisions will go a long way toward restoring confidence in the housing markets by creating a new, stronger regulator with all the necessary tools to oversee Fannie Mae, Freddie Mac and the Federal Home Loan Banks. OFHEO is ready to move forward quickly as part of the new Federal Housing Finance Agency, created by this bill.”

I searched for other agency reports or government press releases to this effect, but found none.

Of course, trusting the current GSE regulator to keep up with the Housing Assistance Bill is a no-brainer since the Senate was slated to vote today and it was widely accepted they would reward Paulson with quick action.

I believe this Housing Assistance Bill is nothing more than a glorified bail out for Fannie Mae and Freddie Mac which could end up costing the tax payers over $100 Billion.

To find out why I think this is a GSE bail out ala Bear Stearns, you can read my post from a few days ago, Housing Bill With GSE Bailout Goes To House Today, when the House passed it.

Good Luck!

UPDATE: July 26, 2008 15:41

NAMB - The National Association of Mortgage Brokers is hailing the passage of the legislation which is never good. But the NAMB press release does outline a few more key elements I have yet to mention, so here goes. NAMB says the key elements are:

1. Modernization of the Government Sponsored Enterprises, Fannie Mae and Freddie Mac, (GSEs) and the Federal Housing Administration (FHA);
2. A nationwide loan originator licensing and registration system;
3. Increases in the FHA loan limits to the lesser of 115 percent of the local area median home price or $625,500 (up from $362,790)’;
4. Increases the cap on mortgage loans Fannie Mae and Freddie Mac can purchase (“conforming loan limit”) to the lesser of $625,000 or 115 percent of an area’s median home price; and
5. A plan by the Department of Treasury to provide funds to aid the GSEs.

Being a mortgage broker for 15 years, I’m always a little embarrassed by NAMB since with them everything is good if it benefits mortgage brokers even if it hurts tax payers. I don’t really see anything in these elements that isn’t already happening or in other legislation other than giving the Treasury a blank check to save Fannie and Freddie.

Silly rabbit…tricks are for kids…

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