Realtors expect residential sales to remain positive

The president-elect of the National Association of Realtors July 11 told a House subcommittee that shifting most of the regulation of Fannie Mae and Freddie Mac from the Department of Housing and Urban Development to the Federal Reserve Board would effectively hamstring the government-sponsored enterprises.

Testifying before the House Subcom-mittee on Capital Markets, Securities, and Government-Sponsored Enterprises, Mar-tin Edwards Jr. said that the legislation would reduce the government-sponsored enterprises' effectiveness as mortgage in-vestors, make them vulnerable to attempts by banks to control financial markets and limit consumers' financial choices and homeownership opportunities.

"The Federal Reserve has little experience regulating housing and real estate-related entities. We believe the central bank may have a natural conflict of interest in that the Fed's primary mission is to control the nation's money supply by regulating the commercial banking system, particularly the bank holding companies which are increasingly competing against the (government-sponsored enterprises) in the secondary mortgage market," Edwards said in an NAR release.

"Furthermore, the Federal Reserve has generated its own share of controversy by raising the prospect of classifying real estate brokerage and property management as "financial activities" under the Gramm-Leach-Bliley Act," he added.

Noting that NAR has disagreed with the government-sponsored enterprises on several issues, including raising FHA loan limits, Edwards strongly endorsed the role that Fannie Mae and Freddie Mac have played in helping to build a good housing finance system.

"Today's homeownership costs are lower and access to mortgage credit even for borrowers with blemished credit is easier and more equitable than ever before, due in no small part to the mortgage investment activities of Fannie Mae and Freddie Mac," he said.

"What would housing finance be like without strong (government-sponsored enterprises)? Would this nation be as well housed? Would as many families have access to the American Dream? Would housing be as strong a sector of the economy as it is today?" Edwards said.