A top House Democrat has offered her own take on overhauling the mortgage market, introducing legislation as Congress begins to move toward comprehensive legislation.
Rep. Maxine Waters (D-Calif.) unveiled her spin on the bipartisan priority Thursday, dubbing it the Housing Opportunities Move the Economy Forward Act.
“Reforming a 10 trillion dollar housing finance market is an immense undertaking that must be carefully considered,” said Waters. “I believe that we have an opportunity to address some of the fundamental flaws of the current system, by ending the perverse incentives created by Fannie Mae and Freddie Mac’s ownership structure and providing an explicit government guarantee that is paid for by industry.”
Like other measures unveiled in both chambers, Waters’s plan would wind down Fannie Mae and Freddie Mac and instead create a cooperative-owned issuer of housing securities.
{mosads}Her bill would eliminate the housing giants over a five-year span, and their replacement, the Mortgage Securities Cooperative, would be capitalized by housing lenders, who would contribute based on their lending volume. Her bill would include an explicit government guarantee paid for with a fee. It would also establish a new regulator to oversee the cooperative, dubbed the National Mortgage Finance Administration.
Details of the plan can be accessed here.
Waters, the top Democrat on the House Financial Services Committee, billed her legislation, the latest in a series of housing overhaul bills offered by Congress, as part of a continuing conversation. Her GOP counterpart, Chairman Jeb Hensarling (R-Texas) unveiled his effort to tackle the subject, called the Protecting American Taxpayers and Homeowners Act, last year. The measure passed the committee in July, but has not been placed before the full House for a vote, driving questions it may lack sufficient support as is.
Meanwhile, Senate Banking Committee Chairman Tim Johnson (D-S.D.) and Sen. Mike Crapo (R-Idaho), announced earlier this month they had struck a deal on their own housing finance bill. The measure is modeled heavily after another bipartisan measure crafted by committee members Bob Corker (R-Tenn.) and Mark Warner (D-Va.), and the panel hopes to mark up the legislation in the relatively near future.
Nonetheless, housing finance reform is still a long shot during an election year, when almost any major legislative work becomes an uphill battle.