A pair of U.S. senators is determined to entice more companies to compete with Fannie Mae and Freddie Mac in the housing-finance market.
A plan being developed by Republican Bob Corker of Tennessee and Democrat Mark Warner of Virginia would lower barriers to entry by removing some advantages Fannie and Freddie now possess. The goal is to create a system sturdy enough to withstand the failure of any one company and avoid a rehash of the taxpayer rescue that occurred during the 2008 financial crisis.
“If you want to eliminate too-big-to-fail, you need to have enough guarantors that you’d really let one fail in the event of a downturn,” said Mortgage Bankers Association President David Stevens, who served as Federal Housing Commissioner during President Barack Obama’s administration.
Read more in Bloomberg.