Senate plan aims to overhaul Fannie, Freddie
WASHINGTON — Congressional efforts to shut down bailed-out Fannie Mae and Freddie Mac took a significant step forward on Tuesday, when key senators announced bipartisan agreement on a plan to overhaul the housing finance system.
The proposal, which will be detailed in the coming days, would slowly shrink the government-controlled companies and replace them with a scaled-back government guarantee for mortgages.
Fannie Mae and Freddie Mac were seized by the federal government in 2008 as they neared bankruptcy from bad loans they guaranteed during the subprime housing boom.
Senate Banking Committee Chairman Tim Johnson, D-S.D., and the panel's top Republican, Mike Crapo of Idaho, said they had reached agreement after a series of hearings last year on how to overhaul the complex housing system and reduce the role of the federal government in backing home loans.
Since the 2008 financial crisis, Fannie, Freddie and the Federal Housing Administration have backed about 90 percent of all new mortgages.
“There is near-unanimous agreement that our current housing finance system is not sustainable in the long term and reform is necessary to help strengthen and stabilize the economy,” Johnson said as he and Crapo released the principles they had agreed should be part of legislation.
The White House praised the announcement as “a good-faith compromise.”
“We support this effort and believe it is a workable bipartisan approach to complete the biggest remaining piece of post-recession financial reform,” said White House spokesman Bobby Whithorne.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Surge in small drones making airline pilots nervous
- Boston airport’s ‘naked man’ remains behind bars
- Obama’s immigration actions neglect business pleas
- Obama administration announces plan to limit smog-forming ozone
- In Ferguson, demonstrations over black youth’s slaying by police officer peter out
- Ferguson testimony filled with variations
- Test vaccine to fight Ebola promising
- Many older people silently harbor gene mutation that could start them on the path to blood cancer
- Fewer adults smoking, U.S. survey finds
- Fissures begin to emerge among Dems
- House ethics panel defers campaign finance investigation of New York Rep. Grimm