Sen. Mike Crapo (R-ID), Chairman of the Senate Banking Committee, has released a legislative proposal that would reform the nation’s housing finance system. Most notably, the proposal would privatize Fannie Mae and Freddie Mac after years of government control. Real estate industry stakeholders have welcomed the plan as a positive step in the discussion regarding housing finance reform.
The Senate proposal follows reports that the acting Director for the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, and the White House are planning their own housing finance reform plan. Republicans and Democrats mostly agree that the housing finance system should be reformed to end the current arrangement where Fannie Mae and Freddie Mac are under government conservatorship. According to the investment bank Keefe, Bruyette, & Woods, Fannie Mae and Freddie Mac have paid the U.S. Treasury $292 billion in dividends since it went into conservatorship in 2008, after receiving $191 billion in government support.