Today's Mortgage Rates

WASHINGTON – Congress is looking at reforms to risky home lending practices, although a House subcommittee hearing on Tuesday suggests lawmakers are still sorting out the complexities of the mortgage market and wondering whether reforms will be helpful.

With the number of foreclosures nationally jumping 47 percent in March from a year ago, lawmakers are weighing whether new lending rules are needed or whether the market is already self-correcting.

Last week, Sens. Charles Schumer, D-N.Y.; Sherrod Brown, D-Ohio; and Bob Casey, D-Pa., introduced a bill that would mandate tougher federal standards for mortgage lenders, even as Senate Banking Committee Chairman Christopher Dodd, D-Conn., was emphasizing that increased regulatory oversight and voluntary reforms by lenders are preferable to legislation.

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Fed Chair Ben Bernanke had some excellent suggestions last week for congressional action on Fannie Mae and Freddie Mac.

Bernanke began with a nice summary of what we’re talking about:

The subject of my remarks today is the regulation and supervision of two large financial companies: the Federal National Mortgage Association (known familiarly as Fannie Mae) and the Federal Home Loan Mortgage Corporation (or Freddie Mac). Fannie Mae and Freddie Mac were created by acts of the Congress and are thus known as government-sponsored enterprises, or GSEs. The Congress chartered these two companies with the goal of expanding the amount of capital available to the residential mortgage market, thereby promoting homeownership, particularly among low- and middle-income households. Although they retain their government charters, Fannie and Freddie were converted (in 1968 and 1989, respectively) to private, publicly traded, for-profit companies….

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