President Reagan signed a billlimiting fees that may be charged by the Government National
Mortgage Association (GNMA) for its guarantees of privately
issued mortgage-backed securities but voiced serious
reservations about the measure.
    He said the bill's provision barring GNMA from increasing
its current fee of .06 pct charged to issuers of single-family
mortgage backed securities "is an unnecessary and risky
congressional intrusion into GNMA's ability to respond quickly
and flexibly to changes in financial markets."
    Reagan said his reservations "must be addressed promptly
through remedial amendments."
    Reagan said the provision hampered GNMA's ability to
maintain reserves necessary to meet its obligations,
"particularly in light of a disturbing increase in claims and in
GNMA's contingent liabilities."
    Reagan said the legislative cap on fees "could well call
into question the adequacy of GNMA's  current reserve of 1.4
billion dlrs, given the 250 billion in GNMA-guaranteed
securities presently outstanding and GNMA's monthly contingent
liability of three billion dlrs."
    Reagan said he had instructed Housing Secretary Samuel
Pierce to work with Congress to draft revisions to the
legislation.
 Reuter
