WASHINGTON — Senate Banking Committee Chairman Mike Crapo, R-Idaho, released a new plan Friday to overhaul the U.S. housing finance system more than 10 years after the government put the government-sponsored enterprises Fannie Mae and Freddie Mac into conservatorship.
“We must expeditiously fix our flawed housing finance system,” Crapo said in a press release. “My priorities are to establish stronger levels of taxpayer protection, preserve the 30-year fixed rate mortgage, increase competition among mortgage guarantors, and promote access to affordable housing. I invite my Senate and House colleagues, the Administration and all interested stakeholders to work together to enact this critically needed reform.”
Crapo’s plan would turn Fannie Mae and Freddie Mac into private guarantors to support the timely repayment of principal and interest to investors for eligible mortgages that are securitized through a platform operated by Ginnie Mae. The plan would also allow for other private guarantors to compete.
The proposal would also convert the Federal Housing Finance Agency’s leadership structure to a bipartisan board of directors instead of a single director.
It would also replace the current affordable housing goals and duty-to-serve requirements with a new Market Access fund, which will provide grants, loans, and credit enhancement to address homeownership and rental housing needs.
The Housing Trust Fund, Capital Magnet Fund and Market Access Fund would collectively be funded through an annual assessment of 10 basis points of the total annual loan volume of each guarantor.
Crapo said the new system will reduce the systemic risk now posed by the GSEs and increase the role of private capital. He said it will ensure a level for originators and lock in uniform underwriting standards.
The plan comes after reports suggesting that acting FHFA Director Joseph Otting and the Trump administration are preparing their own GSE reform plan independent of Congress. Otting reportedly said at an agency meeting that the administration may announce within weeks a plan that could "set a direction for what the future of housing will be in the U.S. and what the FHFA’s part of that will be.”
