Rep. Paul E. Kanjorski Holds a Hearing On the Present Condition and Future Status of Fannie Mae and Freddie Mac

HOUSE COMMITTEE ON FINANCIAL SERVICES, SUBCOMMITTEE ON CAPITAL MARKETS, INSURANCE AND GOVERNMENT SPONSORED ENTERPRISES HOLDS A HEARING ON THE PRESENT CONDITION AND FUTURE STATUS OF FANNIE MAE AND FREDDIE MAC

JUNE 3, 2009

SPEAKERS: REP. PAUL E. KANJORSKI, D-PA. CHAIRMAN REP. GARY L. ACKERMAN, D-N.Y. REP. BRAD SHERMAN, D-CALIF. REP. MICHAEL E. CAPUANO, D-MASS. REP. RUBEN HINOJOSA, D-TEXAS REP. CAROLYN MCCARTHY, D-N.Y. REP. JOE BACA, D-CALIF. REP. STEPHEN F. LYNCH, D-MASS. REP. BRAD MILLER, D-N.C. REP. DAVID SCOTT, D-GA. REP. NYDIA M. VELAZQUEZ, D-N.Y. REP. CAROLYN B. MALONEY, D-N.Y. REP. MELISSA BEAN, D-ILL. REP. GWEN MOORE, D-WIS. REP. PAUL W. HODES, D-N.H. REP. RON KLEIN, D-FLA. REP. ED PERLMUTTER, D-COLO. REP. JOE DONNELLY, D-IND. REP. ANDRE CARSON, D-IND. REP. JACKIE SPEIER, D-CALIF. REP. TRAVIS CHILDERS, D-MISS. REP. CHARLIE WILSON, D-OHIO REP. BILL FOSTER, D-ILL. REP. WALT MINNICK, D-IDAHO REP. JOHN ADLER, D-N.J. REP. MARY JO KILROY, D-OHIO REP. SUZANNE KOSMAS, D-FLA. REP. ALAN GRAYSON, D-FLA. REP. JIM HIMES, D-CONN. REP. GARY PETERS, D-MICH. REP. BARNEY FRANK, D-MASS. EX OFFICIO

REP. SCOTT GARRETT, R-N.J. RANKING MEMBER REP. JEB HENSARLING, R-TEXAS REP. TOM PRICE, R-GA. REP. MICHAEL N. CASTLE, R-DEL. REP. PETER T. KING, R-N.Y. REP. FRANK D. LUCAS, R-OKLA. REP. DONALD MANZULLO, R-ILL. REP. ED ROYCE, R-CALIF. REP. JUDY BIGGERT, R-ILL. REP. SHELLEY MOORE CAPITO, R-W.VA. REP. ADAM H. PUTNAM, R-FLA. REP. J. GRESHAM BARRETT, R-S.C. REP. JIM GERLACH, R-PA. REP. JOHN CAMPBELL, R-CALIF. REP. MICHELE BACHMANN, R-MINN. REP. THADDEUS MCCOTTER, R-MICH. REP. RANDY NEUGEBAUER, R-TEXAS REP. KEVIN MCCARTHY, R-CALIF. REP. BILL POSEY, R-FLA. REP. LYNN JENKINS, R-KAN. REP. SPENCER BACHUS, R-ALA. EX OFFICIO

WITNESSES: JAMES LOCKHART III, DIRECTOR, FEDERAL HOUSING FINANCE AGENCY

EDWARD DEMARCO, COO AND SENIOR DEPUTY DIRECTOR, HOUSING MISSION AND GOALS, FEDERAL HOUSING FINANCE AGENCY

CHRISTOPHER DICKERSON, DEPUTY DIRECTOR FOR ENTERPRISE REGULATION FEDERAL HOUSING FINANCE AGENCY

BRUCE MORRISON, CHAIRMAN, MORRISON PUBLIC AFFAIRS GROUP

SUSAN WACHTER, PROFESSOR OF FINANCIAL MANAGEMENT, UNIVERSITY OF PENNSYLVANIA'S WHARTON SCHOOL

FRANCES MARTINEZ MYERS, SENIOR VICE PRESIDENT OF FOX & ROACH/TRIDENT, LP, BEHALF OF THE NATIONAL ASSN. OF REALTORS

LAWRENCE WHITE, PROFESSOR OF ECONOMICS, NEW YORK UNIVERSITY'S LEONARD STERN SCHOOL OF BUSINESS

MICHAEL BERMAN, VICE CHAIRMAN, MORTGAGE BANKERS ASSN.

JOE ROBSON, ROBSON COMPANIES, CHAIRMAN OF THE BOARD, NATIONAL ASSN. OF HOMEBUILDERS

[*] KANJORSKI: The committee will come to order. This hearing of the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises will be in order. I ask unanimous consent that Ms. Kaptur have permission to participate in today's hearing.

Pursuant to a prior agreement with the ranking member, each side will have 15 minutes for opening statements today. Without objection, all members' opening statements will be made a part of the record.

I yield myself such time as I may consume.

We meet today to examine the present condition and future status of Fannie Mae and Freddie Mac, which together have lost more than $150 billion since the third quarter of 2007. This hearing is not only the first hearing in the 111th Congress on the two government-sponsored enterprises, but it is also the first in a series that the Capital Markets Subcommittee will convene to review these matters. Last summer Congress completed work on an eight-year project by enacting the Federal Housing Finance Reform. Shortly thereafter, the new Federal Housing Finance Agency placed Fannie Mae and Freddie Mac in conservatorship.

Since then, the Treasury Department has purchased $85.9 billion in senior preferred stock at the two enterprises. This investment could ultimate...

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