Housing finance reform bill set for Thursday markup

The Senate Banking Committee will consider a measure on Thursday that would eliminate government-controlled mortgage giants Fannie Mae and Freddie Mac. 

The bill, which was delayed two weeks ago in an effort to attract more Democratic support, is expected to pass the committee with a smaller majority than hoped by its backers. 

Housing industry leaders last week expressed surprise and frustration that six committee Democrats said they weren’t prepared to vote for the long-delayed legislation in its current form. 

They said they had hoped Democrats would continue working on making changes, such as ensuring that underserved populations aren’t left out and big banks don’t control the mortgage market, up until the panel considered the measure.

The latest bipartisan version authored by Senate Banking Committee Chairman Tim Johnson (D-S.D.) and top Republican Mike Crapo (Idaho) is expected to get votes from 12 long-standing supporters of the 22-member panel.

But late last week the group of Democrats — Charles Schumer (N.Y.), Robert Menendez (N.J.), Jack Reed (R.I.), Elizabeth Warren (Mass.), Sherrod Brown (Ohio) and Jeff Merkley (Ore.) — said they couldn’t support the measure.

The major concern is that without a supermajority on the committee, probably around 17 votes, that the bill won’t have enough momentum to pass the Senate and put pressure on the House to act.