Fannie Mae and Freddie Mac would be eliminated and private interests would be on the hook for the first 10 percent of mortgage losses under a bill leaders of the Senate Banking Committee plan to introduce within days.
The bipartisan measure, drafted with input from President Barack Obama’s administration, would replace the U.S.-owned mortgage financiers with a government insurer behind private capital, Senate Banking Committee chairman Tim Johnson and U.S. Sen. Mike Crapo said Tuesday in a statement. The bill would require most borrowers to make down payments of at least 5 percent in the new housing-finance system.
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