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Volume 2014 - Number 34

September 11, 2014

CBO Report: Senate Bill Proposal to Eliminate GSEs Would Save Billions, Depending on the Accounting

A Congressional Budget Office conclusion that the leading bipartisan mortgage-reform bill could save the government a lot of money likely won’t bring the legislation back to life in this Congress, but it could bolster a similar approach down the road. The CBO estimated that replacing Fannie Mae and Freddie Mac with a new securitization program that couples a first-loss position for private capital with back-end government insurance could reduce “direct spending” by $60 billion over the 2015-2024 period. The Housing Finance Reform and Taxpayer Protection Act of 2013, S. 1217, drafted by Senate Banking, Housing and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, would establish...

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After the November elections, how long will it take for a new Congress and White House to pass GSE reform legislation?

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2 to 3 years. GSE reform is complicated.
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