Emerging Senate GSE Reform Bill Tries to Preserve Agency MBS Market But Leaves a Lot Unresolved
June 7, 2013
The bipartisan legislation to replace Fannie Mae and Freddie Mac thats taking shape in the Senate would leverage key reform projects already underway at the government-sponsored enterprises, but it doesnt tackle some of the key transition issues the market would face by putting the GSEs out of business. The reform plan being put together by Sens. Bob Corker, R-TN, and Mark Warner, D-VA, has at its core the risk-sharing projects currently being designed by the GSEs, according to a copy of the draft legislation provided to Inside MBS & ABS. The Secondary Mortgage Market Reform and Taxpayer Protection Act of 2013 would also implement the common securitization platform that Fannie and Freddie are building under the direction of the Federal Housing Finance Agency. The legislation would put...