Sen. Heller pushes bipartisan housing reform bill
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Nevada's U.S. Senator Dean Heller is introducing legislation that would replaces government-sponsored enterprises such as Fannie Mae and Freddie Mac with a privately capitalized system. Heller says the new home financing system will preserve market liquidity and protect taxpayers from future economic downturns. Heller says the legislation is sorely needed in Nevada:
"I don't think there was any state in the country that wasn't more affected by the housing crisis than Nevada. 50 percent of homes in Nevada are underwater. There are 400,000 homes in Nevada that have received notices of foreclosure. If this issue isn't impottant to creating jobs in Nevada, then I don't know what is."
In 2008, during the crisis, Fannie Mae and Freddie Mac were taken into government conservatorship and given a 188 billion dollar capital injection from taxpayers to stay afloat. The legislation mandates 10 percent capital, up front, for the system to protect taxpayers against future bailouts. It also winds down Fannie Mae, Freddie Mac and the Federal Housing Finance Agency within five years of bill passage.
Heller is part of a bipartisan group of senators introducing the bill. He says it will ensure institutions of all sizes have direct access to the secondary market so that local bank and credit unions don't simply get bought up when Freddie and Fannie are dissolved.