Draft Senate GSE Reform Bill Would Scale Back Affordable Housing Lending
A widely leaked draft Senate bill would overhaul the secondary mortgage market and scale back commitments to affordable mortgages.
Offices of the senators working on the draft, Bob Corker, R-Tenn., and Mark Warner, D-Va., say the draft is not final and neither senator has formally committed to it.
The draft bill is the newest attempt at housing finance reform, the last big unfinished business of financial system reform in the aftermath of the Great Recession. After the Federal Housing Finance Agency (FHFA) took Fannie Mae and Freddie Mac–the so-called government sponsored enterprises, or GSEs–into conservatorship in 2008, the Treasury Department invested $187 billion to keep them operating and to support the housing market. The GSEs since returned to financial health and paid $271 billion in dividends to Treasury, but they remain in conservatorship.