Eight legislative proposals introduced this week would provide immediate reform to Fannie Mae and Freddie Mac. The proposals, announced by Financial Services Committee members, will be heard today by the Capital Markets and Government Sponsored Enterprises Subcommittee.
“The bailout of Fannie Mae and Freddie Mac stands at $150 billion and counting, and 95% of the U.S. mortgage market is now being financed by the federal government,” said Rep. Scott Garrett, chairman of the GSE subcommittee. “The status quo is not only unacceptable, it’s unsustainable. This important hearing will explore the steps we can take right now, this very instant, to end the bailout, protect taxpayers and get private capital off the sidelines.”
The proposed legislation comes during the same week that a risk retention requirement was proposed in Washington that would mandate a 5% capital reserve on non-FHA-backed mortgage loans. Qualified Residential Mortgages, or those with certain characteristics, including a 20% minimum down payment, would be exempt.
“Republicans have long recognized the importance and urgency of ending the bailout of Fannie Mae and Freddie Mac and fundamentally reforming the housing finance system. Inaction is not an option,” said Financial Services Committee Chairman Spencer Bachus.
See a description of the eight bills and Financial Services Committee press release.
Written by Elizabeth Ecker