The House Financial Services Committee convened to talk about the fateof the GSEs on Tuesday, reportedly at the urging of Rep. Barney Frank(D-Mass), who has, after years of support, recently started calling for a complete overhaul of the agencies--a start-from-scratchapproach. He has said he would like to see an even greater emphasis placed onaffordable housing.

Testifying before the Committee, Treasury Secretary Timothy F.Geithner said that the Obama administration wants to keep in place someaspects of their roles. He also signaled the Administration wants toexpand its support of the GSEs by ending their status asshareholder-owned companies, noting that the government is going tomake clear what it stands behind and what it doesn't. To many in theindustry, this terminology translates into an explicit backing of theagencies, compared to the implicit status it has had thus far. For their part, the House Republicans, led by Financial ServicesCommittee Ranking Member Spencer Bachus, are calling for a plan thatwould phase out operations of the GSEs within four years.

The commercial real estate industry is weighing in as well. The National Association of Realtors, for example, is advocating ashift in which the GSEs are restructured into government-chartered,non-shareholder-owned authorities. A fully private entity would fostermortgage products more aligned with business goals rather than thenation's housing policy for consumers, according to testimony by VinceMalta, NAR vice president and liaison to government affairs. Also, afully federal structure would put taxpayers at risk, he added. "Wewant to eliminate any scenario that would place taxpayers on the hookto protect these entities. And to combine the two, or merge them withGinnie Mae, would remove competition in the secondary market, and thenew entity could lose focus on it missions to serve low- andmoderate-income families and maintain liquidity in the mortgagemarkets."