American Banker: Backers of Senate GSE plan reject claims that it’s too conservative

American Banker, January 24, 2018: Backers of Senate GSE plan reject claims that it’s too conservative

Supporters of an unreleased Senate bill to revamp the housing finance system are fighting back against suggestions that the latest revision has become more conservative, arguing that it’s a centrist plan that should have wide bipartisan appeal.

American Banker reported last week on an outline of the plan, which would put Fannie Mae and Freddie Mac into receivership and create multiple private mortgage guarantors backed by an explicit government guarantee.

That broadly tracks a Federal Housing Finance Agency blueprint for housing finance reform, but the two plans diverge on certain details including how they handle affordable housing incentives and whether to mandate a specific rate of return for future guarantors that would replace Fannie and Freddie.

Progressive groups are concerned that a housing finance system without Fannie and Freddie in their current state could jeopardize affordable housing, but Parrott said the plan that is being developed would ensure there is funding for low- and middle-income borrowers.

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