WASHINGTON — The House Financial Services Committee narrowly approved legislation to overhaul the mortgage finance system Wednesday morning after more than 10 hours of back-and-forth debate on Tuesday.

The bill, introduced by Chairman Jeb Hensarling, R-Texas, and other senior Republicans on the panel, would unwind Fannie Mae and Freddie Mac and replace the two government-sponsored enterprises with a system lacking new government guarantees. The bill would create a "utility" that would develop best practices for how a new private mortgage market would operate, but would be barred from supporting that market in any way.

The legislation "creates a housing finance system that's designed for homeowners so every American who works hard and plays by the rules can have opportunities and choices to buy homes they can afford to keep," Hensarling said in a press release.

Yet despite the committee's passage of the bill — clearing it for a floor vote in the GOP-controlled House — the legislation is unlikely to get full congressional support. The bill passed the committee by a slim margin of 30 to 27, with two Republicans — Rep. Gary Miller, R-Calif., the committee's vice chairman, and Rep. Michael Fitzpatrick, R-Pa. — joining Democrats in dissenting. A competing piece of legislation in the Democratic-controlled Senate, authored by Democrat Mark Warner of Virginia and Republican Bob Corker of Tennessee, is seen as having more bipartisan support. The Corker-Warner bill would create a new federal agency to cover losses of private mortgage insurers.

Before approving the bill, the House committee had debated several proposed amendments offered by Democrats that were all defeated. The House bill could come up for a full vote in the chamber before the August congressional recess.

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