Posted by Michael S. Canter (pictured) and Matthew D. Bass of AllianceBernstein (NYSE: AB)
A recent US Senate bill calls for a restructuring of the government’s role in housing finance, including winding down Fannie Mae and Freddie Mac. Here are five takeaways from the current proposal.
Momentum is finally building to do something with Fannie Mae and Freddie Mac. The bipartisan Corker-Warner proposal, now making the rounds on Capitol Hill, aims to dissolve the GSEs and start fresh. Meanwhile, Fannie and Freddie are testing innovative mortgage-security structures that transfer the risk of borrower defaults to the private sector. (more…)