Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., are expected to introduce a proposal this afternoon to replace Fannie Mae and Freddie Mac with a government reinsurer. The government-sponsored enterprises would be liquidated within five years, according to the latest draft of the bill, and would be replaced with a Federal Mortgage Insurance Corp.
A legislative proposal to wind down Fannie Mae and Freddie Mac, which could move forward this month, would require private financiers to take primary responsibility for losses, according to a draft. The proposal also would create a Federal Mortgage Insurance Corp., which would guarantee certain loans and help small lenders issue securities, the draft states.