Testifying before the House Financial Services Committee, Kent Conine, president of the National Association of Home Builders (NAHB) and a home and apartment builder from Dallas, said such a change raises grave concerns about the future of the nation's housing finance system.

"Moving program approval authority for Fannie Mae and Freddie Mac to the Treasury constitutes an attack on the mission of HUD by disrupting the capacity of the two giant mortgage lenders to provide the liquidity and stability needed to keep mortgage credit available at the lowest possible cost to home owners and rental housing providers," said Conine.

The Administration's plan would create a new federal agency within the Treasury Department to regulate and supervise the financial activities of Fannie Mae and Freddie Mac, housing-related government-sponsored enterprises (GSEs). The new agency would have general regulatory, supervisory and enforcement powers for GSE oversight, including the authority to establish, enforce and revise capital standards. In addition, oversight of existing GSE activities and approval of new activities would be shifted from HUD to the new Treasury agency. HUD would be left with minimal regulatory authority, limited to oversight of the annual affordable housing goals and a consultative role in program oversight.

In assessing the future regulatory framework for Fannie Mae and Freddie Mac, Conine cautioned lawmakers that it would be a tremendous mistake to turn discussion on GSE regulation into a referendum of the nation's highly successful housing finance system.