GSE Process Debated 

Though both political parties generally agree on the need to eliminate GSEs, they continue to differ on the timetable, with Republicans pushing for a five-year phase-out and the Obama Administration calling for a longer (seven- to 10-year) timeline based on the still-struggling housing markets.

While the eight bills represent the first legislative action taken by Congress on housing finance, they are essentially just the opening salvo in what is expected to be a long and drawn-out process. During the April 5 hearing, House Financial Services Committee Chairman Bachus said the GOP may consider as many as 16 more individual GSE reform bills.

House Republicans are pursuing a dual-track approach to reform efforts. In addition to the individual, smaller bills, the committee may also consider a larger, more comprehensive GSE reform bill (HR 1182) introduced by Rep. Jeb Hensarling (R-TX).

That bill would completely privatize the housing finance system over the next five years. While several of the bills may ultimately win passage by the full House, they will face an uphill battle in the Senate, where there is considerable resistance to many of the measures.

Despite the flurry of activity, partisan divides over the issue make it highly unlikely that comprehensive GSE reform will be enacted before the 2012 elections. Ensuring that housing finance reform “does no harm” to the rental industry remains NAA/NMHC’s top priority.

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