A Senate proposal for dismantling mortgage giants Fannie Mae and Freddie Mac is gathering support from both sides of the political aisle, offering some hope that Congress may finally be able to pass housing finance reform this year, The Hill reports.

Proposed legislation crafted by Senate Banking Committee Chairman Tim Johnson, D-S.D., and ranking member Mike Crapo, R-Idaho, would replace Fannie and Freddie with a Federal Mortgage Insurance Corporation (FMIC).

The FMIC would charge a fee to provide a federal guarantee covering losses on mortgage-backed securities that would only kick in if private firms exhausted 10 percent in capital reserves.

Source: The Hill

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