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Rep. Jeb Hensarling (R-Texas) on March 17 introduced legislation that would end government control of Fannie Mae and Freddie Mac in two years and wind down or privatize the two housing government sponsored enterprises (GSEs) within five years.
The legislation largely mirrors bills that Hensarling introduced in 2008 and in 2010.
With the release of a white paper detailing three options to achieve housing finance reform, the Obama Administration last month began what is anticipated to be a two-year debate on the future of Fannie Mae and Freddie Mac.
Hensarling’s legislation is the first Republican bill introduced in the 112th Congress to overhaul the U.S. housing finance system, and NAHB expects to see several other House Republican GSE legislative reform proposals introduced in the coming weeks.
Hensarling's bill would shrink the size of the GSEs by capping their portfolios at $700 billion and gradually reducing that cap to $250 billion over a five-year period. The measure would also reduce the size of loans they guarantee and increase the fees that they charge for their loans.
If Hensarling’s bill is ultimately approved by the House, it is expected to hit a roadblock in the Democratic-controlled Senate.
Meanwhile, NAHB remains in constant contact with members of Congress on this critical issue.
During last week’s Legislative Conference, builders called on lawmakers to pass comprehensive GSE reform legislation ensuring that the federal government continues to provide a backstop for a reliable and adequate flow of affordable housing credit under all economic and financial conditions.
For more information, e-mail Scott Meyer at NAHB, or call him at 800-368-5242 x8144.