The five-year deadline is flexible and could stretch beyond the 10-year mark, if needed.
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A Senate plan to overhaul the housing finance market aims to wind down Fannie Mae and Freddie Mac in five years, eventually eliminating the government-controlled mortgage giants.Leaders of the Senate Banking Committee provided details of the bipartisan agreement announced last week in its 442-page legislative text released on Sunday afternoon.
The bill, crafted by Senate Banking Committee Chairman Tim Johnson (D-S.D.) and panel ranking member Mike Crapo (R-Idaho), would eventually dissolve Fannie and Freddie and replace it with the Federal Mortgage Insurance Corporation (FMIC).
“This proposal includes an explicit government guarantee in order to add stability to the economy, keep costs reasonable for borrowers and renters and ensure fair access to the secondary market for all lenders,” Johnson said.
“We also include important provisions that will preserve the 30-year mortgage as well as fair and affordable housing options for buyers and renters alike.”