Bill to rebuild mortgage finance without Fannie and Freddie advances

The Senate Banking Committee today voted 13-9 to send a mortgage finance reform bill that’s backed by the Obama administration to the full Senate for debate, but key Democrats who opposed the bill including New York Sen. Chuck Schumer and Massachusetts Sen. Elizabeth Warren could block a vote this year. Critics say the proposal is too much of a departure from the system in place today, Politico reports.

The bill would wind down mortgage giants Fannie Mae and Freddie Mac and replace them with a system in which the private sector would take initial losses on mortgages that are packaged up as securities and sold to investors, and the government would insure against more catastrophic losses. Source: politico.com.

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