NationalMortgageNews states Sen. Bob Corker (R-Tenn.) has introduced legislation to wind down Fannie Mae and Freddie Mac’s share of the mortgage market to ten percent in ten years. The bill would go into effect six months after its passage. It also calls for the credit guarantee the GSEs provide mortgage backed security (MBS) investors reduced to 90 percent. “We are no closer to transitioning Fannie Mae and Freddie Mac off government life support than the day the firms were taken under direct government control in 2008,” Sen. Corker said. In a bi-partisan move, Sen. Kay Hagan (D-N.C.) and Sen. Corker are co-sponsoring a bill to create a covered bond market in the U.S., much like the ones in Europe. “The U.S. lags behind its global peers in the development of a covered bond market because we lack a legislative framework for issuers and investors,” Sen. Hagan said. “With a legislative framework in place, U.S. financial institutions will have a powerful tool that can be used to fund loans to small businesses and households.” Senators Chuck Schumer, (D-N.Y.) and Mike Crapo, (R- Idaho), also are co-sponsoring the covered bond bill.

(Photo credit: Wikipedia/Fannie Mae HQ Washington, D.C.)