Dispute Over Receivership Power Could Sink GSE Bill.

Senate Banking Committee chairman Richard Shelby's effort to extend receivership powers to the new regulator for Fannie Mae and Freddie Mac is running into stiff opposition.

The National Association of Home Builders went on the offense last week, complaining that receivership powers could cause turmoil in the housing market, which depends on the government sponsored enterprises' ability to issue corporate debt to finance their purchases of mortgages.

"We are convinced that this will have a significant impact on the markets. It will impact Fannie and Freddie's debt issuance and ultimately impact the availability and cost of mortgage money," said NAHB chief executive Jerry Howard.

He noted that NAHB's mortgage roundtable of finance experts and lenders met recently and members expressed concerns that investors may unload their holdings of GSE debt or stop buying if the final bill allows the regulator to place a failing GSE in receivership.

Sen. Shelby, R., Ala., the banking committee chairman, is preparing to bring his GSE regulatory bill to the committee this week for a vote, possibly on March 30. Last week, the chairman began negotiations with Sen. Paul Sarbanes, D-Md., to gain the Democrat's support.

Mr. Howard stressed that he hasn't seen the legislative package that Sen. Shelby has developed to strengthen the regulation of the GSEs.

However, Sen. Shelby is very supportive of receivership powers despite the objections raised by the chairmen and chief executives of Fannie and Freddie at a Senate Banking Committee hearing.