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

Testifying before the Committee, Treasury Secretary TimothyF.Geithner said that the Obama administration wants to keep inplace someaspects of their roles. He also signaled theAdministration wants toexpand its support of the GSEs by endingtheir status asshareholder-owned companies, noting that thegovernment is going tomake clear what it stands behind and what itdoesn't. To many in theindustry, this terminology translates intoan explicit backing of theagencies, compared to the implicit statusit has had thus far. For their part, the House Republicans, led byFinancial ServicesCommittee Ranking Member Spencer Bachus, arecalling for a plan thatwould phase out operations of the GSEswithin four years.

The commercial real estate industry is weighing in as well. TheNational Association of Realtors, for example, is advocating ashiftin which the GSEs are restructured intogovernment-chartered,non-shareholder-owned authorities. A fullyprivate entity would fostermortgage products more aligned withbusiness goals rather than thenation's housing policy forconsumers, according to testimony by VinceMalta, NAR vice presidentand liaison to government affairs. Also, afully federal structurewould put taxpayers at risk, he added. "Wewant to eliminate anyscenario that would place taxpayers on the hookto protect theseentities. And to combine the two, or merge them withGinnie Mae,would remove competition in the secondary market, and thenew entitycould lose focus on it missions to serve low- andmoderate-incomefamilies and maintain liquidity in the mortgagemarkets."