Seniles Seniors Senators have unveiled the 442-page Johnson-Crapo bill that will eliminate the quasi-government entities Fannie Mae and Freddie Mac and replace them with…an entity backed entirely by the federal government.
On Sunday, Senate lawmakers unveiled the 442-page plan that will eliminate the mortgage-finance giants; replacing them with a new system in which the government would continue to play a potentially significant role insuring U.S. home loans. The Johnson-Crapo bill would, as WSJ reports, construct an elaborate new platform by which a number of private-sector entities, together with a privately held but federally regulated utility, would replace key roles long played by Fannie and Freddie.
The Senate bill would repurpose the firms’ existing regulator as a new “Federal Mortgage Insurance Corp.” and charge the agency with approving new firms to pool loans into securities. Those firms could then purchase federal insurance to guarantee payments to investors in those bonds. The FMIC would insure mortgage bonds much the way the Federal Deposit Insurance Corp. provides bank-deposit insurance.
I have no doubt that the FMIC would eventually be covering only 0.7% of the value of all mortgages, just as the FDIC only has enough assets to cover only 0.7% of all deposits in commercial banks.
I wish the jokers in the federal government would realize that it is their past meddling that has totally borked the current housing, credit, and student loan markets. And that they would resolve to stop interfering in the U.S. economy.
I guess they never got the joke: