GOP Plots Slow Death For Fannie, Freddie

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WASHINGTON – Republican House members, who have been calling for a phase-out of Fannie Mae and Freddie Mac, are planning to introduce as many as eight bills this morning that would effectively kill the two secondary mortgage market giants bit by bit.

The bills would do separately what one bill introduced last week by Texas Republican Jeb Hensarling would have done all at once, that is wean Fannie and Freddie off government subsidies, increase the mortgage guarantee funds and lower the caps on conforming mortgages the two companies can buy.

The aim is to induce a gradual takeover of the secondary mortgage market by private entities, according to Capitol Hill sources familiar with the plan.

While the bills could attract enough votes to pass the Republican-controlled House, they will have slimmer prospects in the Democrat-controlled Senate, which is formulating a phase-down plan of its own for Fannie and Freddie.

The mortgage giants, which buy about half of all residential mortgages originated in the U.S., were taken over by the government in September 2009 and have eaten up about $175 billion in federal assistance since then.

 

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