A bipartisan bill that would wind down and eventually replace government-sponsored entities Fannie and Freddie was indefinitely put on hold by a Senate committee on Tuesday.
The Johnson-Crapo bill, one of four Congressional measures targeting GSE reform, is sponsored by Sen. Mike Crapo (R-Ida.) and Sen. Tim Johnson (D-S.D.). While it has more bipartisan support than the other GSE reform bills, according to a HouseWire article, the bill lacks “sufficient” bipartisan support, said the Senate Banking, Housing and Urban Affairs committee.
The bill would wind down Fannie Mae and Freddie Mac’s roles in housing finance and replace it with financial entities that would issue mortgage-backed securities with their own skin in the game prior to federal insurance relief kicking in.
But a “serious vote” on the measure won’t happen before the mid-term elections, reports HousingWire.
“I am confident that if we held the vote this morning, we would have more than the minimum number of votes needed to pass it on to the Floor,” said Crapo, a co-author of the bill and ranking minority member, in his statement to the Senate committee on Tuesday. “Nevertheless, while I do not relish the idea of a short delay, I am pleased that a number of Senators believe with just a brief period of additional time to consider it, they will have the opportunity to productively join us in efforts to reform the current system.”
Other housing reform measures include the House’s PATH Act and HOME Forward Act, and the Senate’s Corker-Warner bill.
“Housing finance reform remains the most significant piece of unfinished business from the 2008 financial crisis. Fannie Mae and Freddie Mac greatly contributed to the housing bubble, the financial crisis, and the dramatic government intervention that resulted,” Crapo said. “The current system is unsustainable, leaves taxpayers exposed to potentially trillions of dollars in liabilities, and has left the mortgage market in a state of limbo, forcing private capital out of the market.”
Read more at HousingWire.
Written by Alyssa Gerace