A bipartisan bill that could be introduced in the Senate this month envisions liquidating Fannie Mae and Freddie Mac within five years and replacing them with a government reinsurer of mortgages, with private financial firms taking the first hit on losses, Bloomberg News reports.

Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., are working with colleagues on a plan to expand the role of the private sector housing finance, while maintaining mortgage credit. A discussion draft of the bill is now being circulated among housing industry leaders, and the bill that’s introduced will likely reflect their feedback.

While there’s been much talk about the future of Fannie and Freddie since they were placed in conservatorship in 2008, “Going from various proposals to a document that contains actual legislative language is an important step,” an analyst told Bloomberg. Source: bloomberg.com.

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