The Idaho Republican’s plan, a three-page paper, does not address several of the trickiest issues that have held up legislation to overhaul the two government-sponsored enterprises since they were taken into government custody in 2008. Nevertheless, it presents a starting point for negotiations between the two parties and the White House to try to resolve Fannie and Freddie’s unusual status as wards of the government.
"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 proposes to retain a government guarantee for mortgage-backed securities, a feature that the housing and banking industries argue is necessary in order to facilitate the existence of 30-year, fixed-rate mortgages, but one that many congressional conservatives oppose.
Ginnie Mae, the government corporation that today guarantees mortgage-backed securities offered by the Federal Housing Administration, would be responsible for guaranteeing securities issued by private guarantors, including reprivatized versions of Fannie and Freddie as well as competitors.