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A leading senator involved in efforts to reform the government’s relationship with Fannie Mae and Freddie Mac said yesterday that he sees “commonality” within the housing finance sector on how lawmakers should alter the government-sponsored enterprises, MorningConsult.com reported. “What I see happening, right now, is a real consolidation of ideas,” Sen. Bob Corker (R-Tenn.) said yesterday at Senate Banking Committee hearing. “It just seems to me that the thinking around what needs to happen on GSE reform is coming to a place where I truly believe we’re going to be able to pass a piece of legislation this year.” Corker has been active in the GSE debate for years and co-authored a reform measure with Sen. Mark Warner (D-Va.) that the Banking panel approved in 2014. He said he’s come to believe there’s agreement on the left and the right that a reform bill needs to include a paid-for and explicit, rather than implicit, government guarantee for catastrophic losses. Achieving that might be difficult for Republicans, Corker noted.

Two U.S. senators working on a bipartisan overhaul of Fannie Mae and Freddie Mac are seriously considering a plan that would break up the mortgage-finance giants, Bloomberg News reported yesterday. The proposal by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.) would attempt to foster competition in the secondary mortgage market, where loans are packaged into bonds and sold off to investors. Corker and Warner’s push to develop a plan marks Congress’ latest attempt to figure out what to do with Fannie and Freddie, an issue that has vexed lawmakers ever since the government took control of the companies in 2008 as the housing market cratered. The lawmakers’ plan is still being developed, and a Senate aide cautioned that no decisions had been made on any issues.

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.

The nation’s top consumer regulatory agency is seeking to hold a South Carolina housing finance company in contempt for moving too slowly to respond to a judge’s order that it turn over documents and audio recordings, the New York Times reported today. A federal judge on Tuesday referred the matter to a United States magistrate judge for a hearing. The unusual legal maneuver by the agency, the Consumer Financial Protection Bureau, to hold National Asset Advisors and a related company in contempt shows that the agency is proceeding with an investigation into businesses associated with the sale of homes to lower-income borrowers with seller financing. The motion for contempt arises from a court battle with National Asset Advisors and Harbour Portfolio Advisors, one of the nation’s largest sellers of homes on contracts for deed — a type of seller financing usually aimed at low-income consumers who cannot qualify for conventional mortgages. The consumer bureau filed a lawsuit last year in federal court in Michigan to require Harbour Portfolio Advisors and National Asset Advisors to comply with a subpoena seeking information about Harbour’s sale of rundown homes to thousands of people in more than a dozen states.