Two bills have emerged as dueling proposals to reform the GSEs: the Housing Finance Reform and Taxpayer Reform Act (the “Corker-Warner Bill”) in the Senate, and the Protecting American Taxpayers and Homeowners Act of 2013 (“PATH Act”) in the House. The key thrust of both bills is to protect taxpayers from absorbing losses in the secondary mortgage market. Although the bills remain in committee as t hey gain traction in both chambers, any final legislation will likely have features of each proposal. A high-level summary of the bills follows.
The Corker-Warner Bill -
Federal Mortgage Insurance Corporation (“FMIC”): Modeled after the FDIC, this agency would replace the GSEs within 5 years. The FMIC would provide a catastrophic guarantee to investors through the mortgage insurance fund it would administer.
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Topics: Affordable Housing, Dodd-Frank, FDIC, FHA, FMIC, GSE, Housing Finance Reform, Mortgages, PATH Act, Tax Reform
Published In: Finance & Banking Updates, Securities Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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