Garrett: Congress should limit government's role in mortgage finance
Congress needs to limit the federal government's role in the mortgage finance market before any meaningful reform can take root, according to one leading Republican member of the House. Speaking in Orlando at the American Securitization Forum conference Monday, Rep. Scott Garrett (R-N.J.) also fretted about the role regulators play in securitization, saying too often they put their own agendas and self interests first. Garrett, who is chairman of the House subcommittee on capital markets and the GSEs, referenced a recent meeting with regulators where after a half hour he realized there wasn't going to be any agreement on the definition of a qualified residential mortgage. "We can have hearings and encourage them to work together and that's all we can do," he said. Still, Garrett implored regulators to take their time and ensure new rules mandated by Dodd-Frank are implemented as smoothly and efficiently as possible. "I think it will do more harm to the economy and produce less certainty if regulators rush to judgment with poor regulations that don’t work and we'll have to come back with another set of regulations later," he said. "That only creates more confusion for the market. We encourage them to take their time." Meanwhile, the Obama administration recently delayed release on its recommendations for future of Fannie Mae and Freddie Mac, and Republicans weren't too pleased. "This administration can't help itself from intervening and create another regulatory body," Garrett said in reference to the Consumer Financial Protection Bureau, which is set to be fully operational this summer. He also said investors don’t factor enough risk when analyzing investment opportunities. But he still wants to see a fully private mortgage market over time because "the government has never been good at pricing risk." Write to Jason Philyaw.