March 11, 2014 Alert - Senators Johnson and Crapo Reach Agreement on Housing Finance Reform
Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) of the Senate Committee on Banking, Housing and Urban Affairs announced that they have reached an agreement on a housing finance reform proposal and will release the draft legislation in a matter of days. In a statement posted on the Committee website, Chairman Johnson commended Senators Corker (R-TN) and Warner (D-VA) for providing “a strong framework to build on.” The legislative proposal will include the following: wind down and ultimately eliminate Fannie Mae and Freddie Mac; promote a smooth transition period to the new system by providing specific benchmarks and timelines to guide the Federal Mortgage Insurance Corporation (FMIC) and market participants; mandate 10 percent private capital up front and create a mortgage insurance fund to protect taxpayers against future bailouts; create a member-owned securitization platform that will issue a single, standardized security guaranteed by the FMIC; establish a cooperative entity with a cash window to ensure lenders of all sizes have access to the secondary mortgage market; retain the 30 year fixed-rate mortgage; and maintain broad liquidity in the TBA market.

Many of the legislation’s proposed reforms are consistent with those formulated by SFIG’s GSE Reform Task Force. The Senate Committee on Banking, Housing and Urban Affairs is expected to mark-up the bill within the coming weeks. SFIG will continue to update its membership as the process unfolds. We look forward to the upcoming release of the draft bill and will work closely with Congress to ensure consideration of our recommendations throughout the legislative process.

There will be a call tomorrow at 4 p.m. (EST) for the GSE Reform Task Force. Please contact if you would like to become a member of the GSE Reform Task Force and contribute to this initiative.
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