Rep. Jeb Hensarling (R-Texas) told a conference of mortgage bankers yesterday that his 2013 bill that would have ended Fannie Mae and Freddie Mac still remains the best path forward for reform of the housing finance market, the Washington Examiner reported today. The bill cleared the committee with Republican votes in 2013, but failed to advance in the House thanks to finance industry skepticism. Notably, it would have dissolved the bailed-out mortgage giants Fannie Mae and Freddie Mac. In their stead, it would have created a privately-run utility to facilitate the creation of mortgage-backed securities and support a secondary market for home loans. The bill would have removed government backing for mortgage-backed utilities, though. At the time, many industry groups, including the Mortgage Bankers Association, argued that eliminating the government backstop for mortgage-backed securities would make 30-year fixed-rate loans unavailable. Hensarling yesterday called it a "fable" that his legislation would have ended the 30-year fixed-rate mortgage.
