WEST PALM BEACH, Fla. – If there's one word that can be used to describe the mortgage market in 2005 it's `change.' Not only did the year see the end of the refinance market that boasted the lowest interest rates in years and the emergence of many so-called exotic loan products such as 40-year mortgages and interest-only mortgages, and the emergence of the purchase market. It also saw the passage by Congress of legislation to reform the regulation of the housing Government Sponsored Enterprises. After five years of effort that included 20 hearing and listening to testimony from more than 100 witnesses, Congress passed U.S. Rep. Richard Baker's (R-La.) legislation Oct. 26 on a 331-90 vote that among its provisions provides for stricter oversight regulation of the three housing GSEs by creating a new independent regulator – the Federal Housing Finance Agency. At press time, there was also a Senate bill that had been approved by the Senate Banking Committee but hadn't yet come to the full floor for a vote. GSE reform legislation had been in Rep. Baker's sights since 2000, but the measure got several false starts. It was the accounting mismanagement scandals at Freddie Mac and Fannie Mae in 2003 and 2004, respectively, that caught many legislators' attention and helped push H.R. 1461 through to passage. Among the provisions of the measure, it: * creates a new, private fund for affordable housing and gives priority to areas of the country affected by the recent hurricanes. * grants the new regulator the authority to adjust the portfolio holdings of the GSEs, as well as the authority to increase minimum capital and risk-based capital standards. * grants the new regulator the authority to approve new programs and new business activities of the GSE.