Corker: Fannie profits no excuse to slow-walk housing reform

{mosads}Corker’s comments come as Fannie and fellow GSE giant Freddie Mac, which for years have been the subject of harsh Republican critiques, are now actually making money again.

On Tuesday, Fannie Mae reported it reaped a $17.2 billion profit in 2012, an all-time record for the housing giant and its first profit since 2006, before the housing bubble burst. The profits have Fannie executives claiming the GSE is looking at turning a profit for the “foreseeable future.”

The turnaround, sparked by a recovering housing market and improved books at the GSEs, marks a sharp departure from prior years, which saw the GSEs post billions of dollars in losses. In 2011, Fannie lost $16.9 billion.

Fannie and Freddie required a government bailout to stay afloat following the subprime mortgage crisis, necessitating roughly $188 billion in federal funds.

But with the housing market turning around and the GSE’s books looking healthier, Fannie has paid back $35.6 billion to the government.

Corker’s remarks serve to push back against a looming concern facing housing reform, which is that a pair of profitable GSEs could remove pressure from any broad legislative efforts, even as both parties agree the current system is unsustainable.

In March, Corker joined with other Banking Committee members in both parties to introduce a bill that would block policymakers from using “guarantee fees” collected by Fannie and Freddie to cover other government spending.

Congress had previously tapped the “g-fee” as a way to cover the costs of other policies, such as the two-month extension of the payroll tax cut at the end of 2011. By blocking those fees from being used as a piggy bank of sorts, the lawmakers contend it will better prepare Fannie and Freddie to be transitioned away from their outsized role in the market.

The bill would also block the Treasury Department from selling its shares in the GSEs without comprehensive reforms in place and Congress’s go-ahead.