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Two Senators propose a New Government Agency

Mortgage News > Two Senators propose a New Government Agency
Date: 06/24/2013    Two Senators propose a New Government Agency

Senators Bob Corker (R–TN) and Mark Warner (D–VA) are working together on a draft bill "Secondary Mortgage Market Reform and Taxpayer Protection Act of 2013".  If this bill becomes law it would wind down Fannie Mae and Freddie Mac and replace them with a new model by which private market equities can purchase loans from mortgage originators with credit guarantees.

The bill that they are proposing would create a new government agency to oversee mortgage lending. This new agency would be called the Federal Mortgage Insurance Corporation (FMIC). If this bill in its current state becomes law the FMIC would replace the Federal Housing Finance Authority (FHFA) as conservator of Fannie Mae and Freddie Mac.

The Senators hope that passage of this bill will provide the secondary market with liquidity and additional mortgage credit all while protecting the taxpayers from having to absorb losses from risky lending practices.