[Congressional Record Volume 147, Number 156 (Tuesday, November 13, 2001)]
[Extensions of Remarks]
[Pages E2055-E2056]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           GOVERNMENT GUARANTEE OF GINNIE MAE AND FREDDIE MAC

                                 ______
                                 

                           HON. ROBERT W. NEY

                                of ohio

                    in the house of representatives

                       Tuesday, November 13, 2001

  Mr. NEY. Mr. Speaker, as the Vice Chairman of the Capital Markets 
Subcommittee of the Financial Services, I wanted to join in the concern 
expressed by the Subcommittee Chairman Richard Baker about a proposal 
to expand the government guarantee provided by Ginnie Mae (the 
Government National Mortgage Association) into the conventional 
mortgage market.
  Last week H.R. 3206, ``The Home Ownership Expansion and Opportunities 
Act of 2001,'' was introduced in the House of Representatives. While I 
strongly support the spirit and intent of this proposal, I am deeply 
concerned that the unintended consequence of the bill will be to make 
the American Taxpayer liable for unnecessary risk in the event of an 
economic downturn.

[[Page E2056]]

  Over the past few years, under the leadership of Chairman Baker, the 
Financial Services Capital Markets Subcommittee has spent considerable 
time examining the potential of an ``implied'' government guarantee of 
Fannie Mae and Freddie Mac. I am concerned, because H.R. 3206, as 
introduced, would expand the express government backing of Ginnie Mae 
into the conventional home loan market. This could place American 
Taxpayers at a greater risk of assuming more default risk for home 
mortgages.
  Our housing finance system is the model of the world. Combining the 
conventional mortgage market, the government market of FHA and VA, and 
the jumbo market, the national homeownership rate is close to 68%. The 
housing sector is the bulwark of the economy and I am very willing to 
consider good public policy to help more Americans achieve the dream of 
home ownership. I worry, however, that H.R. 3206 is an unnecessary 
expansion of a federal government guarantee that inappropriately puts 
American Taxpayers at risk.

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