‘Middle Ground’ GSE Reform Proposal Would Keep Fannie, Freddie Alive
Mortgage Orb - July 2, 2014 - July 2, 2014
July 2, 2014, By Patrick Barnard
A trio of Democratic congressmen who serve on the House Committee on Financial Services next week will formally introduce a “middle ground” housing finance reform proposal that uses private sector market forces to appropriately price risk while putting the scale and security of a government guarantee behind the program.
The alternative plan by Reps. John K. Delaney, D-Md., John Carney, D-Del., and Jim Himes, D-Conn., a draft of which was unveiled in January, would establish a new government reinsurance agency that would back all qualified mortgages, but at the same time, all issuers would be required to maintain a 5% private capital reserve to cover first losses.
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