A consortium of real estate industry groups are banning together for what they say is "defense of America's homeownership opportunities," but less glamorously (and more realistically) is a defense of the government-sponsored enterprises Fannie Mae and Freddie Mac.

The alliance will "serve as the nexus for organizations promoting home ownership and housing choice in America," said Robert Mitchell, head of the National Association of Home Builders. "It will educate consumers, and provide them with news aout the positive developments in the housingfinance system as it expands opportunities for more Americans to become homeowners."

Members of the alliance to date are:

• The NAHB
• The American League of Financial Institutions
• The Enterprise Foundation
• Fannie Mae
• Freddie Mac
• Independent Community Bankers Association
• Local Initiatives Support Corporation
• National Association of Real Estate Brokers
• National Bankers Association, and
• National Urban League

Conspicuous in its absence from the list is the National Association of Realtors, which has been invited to join but not yet made a decision.

"We expect to have an announcement soon on whether we'll be involved," said NAR spokesman Steve Cook. "We want to see what develops. If the group gets into issues such affordability, home ownership and smart growth, those, of course, are issues that are very important to us."

Unstated but implied was that if the sole purpose of the group is to defend Fannie and Freddie, the NAR might view its participation differently.

At the core of the issue are the far-flung business enterprises the GSEs have become involved in over the past few years.

The Financial Roundtable, a consortium of major lending institutions, already has formed an organization called "FM Watch" whose purpose is to monitor the GSEs to make sure they are not intruding on businesses where there already is ample competition between private companies.

Bills also are moving through Congress to keep Fannie and Freddie in check. While FM Watch supports those bills, the Homeownership Alliance is expected to opposed them.

The alliance is headed by Rick Davis, former presidential campaign manager for Sen. John McCain, R-Ariz., who argues that home ownership is a "core national priority."

"Yet, some critics of the system, particularly those who disagree with the role currently played by the housing Government Sponsored Enterprises, are implicitly calling for policy makers to reconstruct the system so it can be more like that of other industrialized countries. But our current system is much better than theirs.

"Forty-percent downpayments, like they have in Germany, and huge prepayment penalties that are the norm for refinancing in some European countries, are things we did away with decades ago, and we certainly don't want ot turn back the clock."

Published: October 2, 2000

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