New bill calls for single government-run mortgage finance entity

Reuters reported that mortgage finance firms Fannie Mae and Freddie Mac could be phased out by a single government-run entity under a proposed bill from Republican Rep. Gary Miller of California and Democratic Rep. Carolyn McCarthy of New York.

According to Reuters, the new financing company would purchase mortgages as government-backed securities, but would not have any shareholder investors. After being seized by the federal government due to major losses in 2008, Fannie Mae and Freddie Mac, in association with the Federal Housing Administration, back more than 85 percent of all U.S. residential mortgages. Bloomberg reported that the two financing firms have cost the Treasury Department $130 billion since 2008.

House Republican leaders have pushed for the elimination of the firms by selling them off, which angered groups such as homebuilders, investment banks and consumer advocates who lobbied to preserve a government role in the solution, Bloomberg reported.  

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