Bipartisan Overhaul of GSEs Reportedly in the Works

A bipartisan duo of senators is reportedly working on a proposal that would break up the government-sponsored enterprises (GSEs).

 

According to a Bloomberg report that cites unnamed individuals who allegedly have “knowledge of the matter,” Sens. Bob Corker (R-TN) and Mark Warner (D-VA) have been working since the beginning of the year to jump-start the long-stalled GSE reform; Fannie Mae and Freddie Mac were put in federal conservatorship in September 2008 and continue to dominate the secondary market. Among the reported ideas that the senators have considered is dividing the GSEs’ single-family businesses from their multifamily businesses, and then split the single-family operations again into even smaller companies.

 

Sen. Warner told a Mortgage Bankers Association conference last week that he and Sen. Corker had found consensus on several issues, including developing a system that maintains the 30-year mortgage. However, neither senator has offered a timeline on when their finalized proposal would be put forward.

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