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OFHEO Questions Mortgage Proposal
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Over the past year, the matter has been stalled in the Banking Committee, where supporters and critics of the two companies have been unable to reach a compromise. Until recently, Chairman Christopher J. Dodd (D-Conn.) was spending much of his time seeking the Democratic presidential nomination.
Dodd said yesterday that addressing the economic situation is a higher priority than strengthening oversight of the two companies, known as government-sponsored enterprises, or GSEs.
"We've got a major, major problem in our country, . . . and we've got to act," he said.
Dodd pledged to tackle a broader GSE bill soon. "We intend to get this done," he said.
Schumer, one of the GSEs' strongest allies, sharply criticized them at the hearing, saying that despite the advantages that come with their government-sponsored status, they have done too little to help borrowers stay in their homes.
"Instead of leading the charge to help troubled borrowers, we've had to push them forward every step of the way," Schumer said.
Schumer suggested making it easier for the companies to help by loosening another constraint on their business -- reducing the amount of capital they must maintain as a cushion against losses. In exchange for such relief, the companies should make a substantial new commitment to help homeowners struggling with subprime loans, Schumer said.
