Senate Banking Committee Leaders Release Housing Finance Reform Plan

Monday, March 17, 2014 - 7:00am

Senate Banking Committee Chairman Tim Johnson, D-S.D., and Ranking Member Mike Crapo, R-Idaho, have released the legislative text of the bipartisan housing finance reform agreement they announced last Tuesday. In addition to legislative text for the Housing Finance Reform and Taxpayer Protection Act of 2014, they also released a section-by-section description of the legislation and a detailed summary.

The bill would eventually dissolve Fannie Mae and Freddie Mac and replace them with the well-capitalized entities authorized to sell mortgage-backed securities, backed by government guarantees supplied by the newly created Federal Mortgage Insurance Corporation (FMIC). While these mortgage securitization firms would not have to adhere to the affordable housing goals of Fannie Mae and Freddie Mac, they would pay a 10 basis point fee to access the government guarantee, and such fees would finance the Housing Trust Fund, the Capital Magnet Fund and the newly created Market Access Fund to promote affordable housing. Sens. Johnson and Crapo plan to hold a committee markup in the coming weeks.