Senators Bob Corker (R-TN) and Mark Warner (D-VA) recently introduced the Housing Finance Reform and Taxpayer Protection Act of 2013 (S.1217),  which would reform the secondary housing finance market by eliminating Fannie Mae and Freddie Mac and replacing the agencies with the Federal Mortgage Insurance Company (FMIC).  The primary purpose of the FMIC would be to provide liquidity, transparency, and access to mortgage credit by supporting the secondary mortgage market, to produce residential mortgage-backed securities, and to protect the taxpayer from having to absorb losses incurred in the secondary mortgage market during periods of economic stress.   The FMIC would also absorb all of Fannie and Freddie’s multifamily lending authority and would have the authority to guarantee multifamily loans.  The measure would requires both the FMIC and Government Accountability Office (GAO) to submit reports to Congress on the feasibility of transitioning to a private multifamily secondary mortgage market.   S. 1217 is cosponsored by Senators Mike Johanns (R-NE), Jon Tester (D-MT), Dean Heller (R-NV), Heidi Heitkamp (D-ND), Jerry Moran (R-KS), and Kay Hagan (D-NC) and has been referred to the Senate Committee on Banking, Housing, and Urban Affairs.
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