NEW YORK (TheStreet) --Legislation expected soon that would wind down Fannie Mae (FNMA) and Freddie Mac (FMCC) is running into resistance from both the left and the right before it has even been completed.
Politico reports that Senators Elizabeth Warren (D., Mass.) and Sherrod Brown (D., Ohio) both consider the deal between Mike Crapo (R., Idaho) and Tim Johnson (D., S.D.) to be a "non-starter" and that Senate Majority Leader Harry Reid (D., Nev.) is wary of anything that might slow the fragile recovery in his home state.
Warren certainly didn't sound enthusiastic about the deal in remarks she made at a conference Thursday hosted by the National Community Reinvestment Coalition that were reported by American Banker.
"Housing finance reform was too important to rush a committee deal on, and in my view, it's also too important to rush a markup on. We should have a full, open discussion before we decide to set out on a new path," she said.
As for Reid, he had already made his objections known in August when President Obama was in Phoenix talking about winding down Fannie and Freddie.
Republican opposition also appears plausible as Sen. Pat Toomey (R., Pa.)submitted a strongly-worded Question For the Record to Treasury Secretary Jack Lew on Friday, though his office later conceded to me it misidentified the York County pension fund as a shareholder in Fannie and Freddie and will be revised. Toomey hasn't yet made clear his views on the bill, however, noting, as Warren did Thursday, that he is awaiting its final language.
Common and preferred shares of Fannie and Freddie sold off sharply Tuesday after the Crapo-Johnson deal was announced, but have regained some of those losses. Fannie common shares were up 7.93% to $4.09 early Friday afternoon, while Freddie Mac common shares were up 8.72% to $3.99. Before Tuesday's selloff, the shares were at multi-year highs of $6 for Freddie and $6.35 for Fannie.
--Written by Dan Freed in New York