WASHINGTON — Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., introduced their much discussed legislation to reform the mortgage finance market on Tuesday, an effort that continues to be lauded by fellow lawmakers, regulators and industry.

The Housing Finance Reform and Taxpayer Protection Act would wind down Fannie Mae and Freddie Mac to make way for a system of private mortgage insurers that would serve in the first loss position, with the government providing a catastrophic guarantee under a new agency, the Federal Mortgage Insurance Corporation. The lawmakers were joined by six cosponsors from both parties: Mike Johanns, R-Neb., Jon Tester, D-Mont., Dean Heller, R-Nev., Heidi Heitkamp, D-N.D., Jerry Moran, R-Kan., and Kay Hagan, D-N.C., all members of the Senate Banking Committee.

"We believe the housing market is ready for reforms like this, and that the private sector has been waiting for new rules of the road," Warner said in a press release.

Numerous observers, including regulators, industry officials and academics, praised the substantive, bipartisan effort, as many did with a similar discussion draft of the bill that leaked earlier this month.

"The introduction of this bipartisan bill represents an important step in redefining the government role in housing finance and is a positive framework on which to begin this crucial debate," said David Stevens, president and chief executive of the Mortgage Bankers Association, in a statement. "Senators Warner and Corker are to be commended for taking a thoughtful and comprehensive approach to drafting a bill to restructure the secondary mortgage market in a way that provides sufficient liquidity to the market so that lenders can offer a full range of sustainable mortgage credit to qualified borrowers through all market conditions."

The Federal Housing Finance Agency, which would play a critical role in any reform of the housing finance system, noted that it "welcomes" the bill's introduction, according to an agency statement.

"Fannie Mae and Freddie Mac have been in conservatorship for almost five years and Congressional action is needed to resolve this situation and expand private sector participation in the U.S. housing finance market," the agency added.

But questions loom about where the bill goes from here. The most pressing question is whether Sens. Tim Johnson, chairman of the banking panel, and Mike Crapo, the top Republican on the committee, will take up the bill, or substantial pieces of it, this year.

Johnson thanked the lawmakers for their efforts on the bill in a statement on Tuesday, while Crapo told reporters earlier in the day that the legislation is a "good step." But neither officially endorsed the plan laid out by Corker and Warner.

"As I understand it, it's their goal to commit [Federal Housing Administration] reform, to finish it by the August recess, and it's their goal to take up GSE reform," Corker said at a press conference for the bill on Tuesday. "I'm sure there are going to be other ideas to be put forward, and I know that any bill can be improved."

Still, Tester noted at the press conference that he hopes the lawmakers can "encourage the full committee to do a markup in the fall so we can get this bill to the floor."

But even if the lawmakers are able to gain some traction within their own committee and later the full Senate, they still face numerous hurdles in the House, where Rep. Jeb Hensarling, R-Texas, chairman of the Financial Services Committee, is working on his own legislation that's expected to push for a fully private system with no government backstop.

"I know the House is going to move first to try to do something without government involvement in any way, and I know that hasn't happened yet, but I think we've arrived at something that's an outstanding blend of the two," Corker said at the press conference.

Heitkamp, a freshman senator and former North Dakota Attorney General, expressed frustration with the House, asking that everybody in Congress move past party ideology on the issue.

"It is not acceptable anymore in the United States Congress to delay making decisions based on ideology or based on a point of view that no longer moves the country forward," she said at the press conference. "That's a critical part of the effort that we've embarked on and engaged on here and that signal needs to be send loud and clear."

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