Housing reform legislation that would phase out Fannie Mae and Freddie Mac over the next five years while establishing a new entity, the Federal Mortgage Insurance Corporation (FMIC). Notably, the FMIC would become the new federal regulator of the mortgage industry, absorbing the current regulating agency, the Federal Housing Finance Agency. This new FMIC would explicitly guarantee 90% of losses on such securities; private institutions and lenders would cover the other, and initial, 10%. This risk-sharing would be waived in the instance of financial crisis, and could be employed up to three times over a three-year period.
Despite White House collaboration and its passage by the Senate Banking Committee, by a 13-9 vote, the bill faces a tough road to a full Senate vote and is opposed by the majority in the House of Representatives.