The House Financial Services Committee voted 30-27 to approve the housing reform bill introduced by Rep. Jeb Hensarling (R-TX).
As passed, the bill would wind down Fannie Mae and Freddie Mac within five years, replace them with a “public utility” to oversee the creation and maintenance of a single platform for the private sale of mortgages and end all federal guarantees. It also would reduce the mortgage insurance coverage provided by the Federal Housing Administration to only 50% of the mortgage being insured and re-target the FHA to serve first-time and low-income homebuyers.
ABA said that it believes that a federal guarantee for certain loans is still needed to maintain a stable housing market and that it will work toward that goal as the legislative process goes forward. The bill also contains several ABA-advocated regulatory relief provisions.
Read ABA’s memo on the bill.