Full Privatization Of The Mortgage Industry?

Georgia Senator Johnny Isakson introduced a bill on Friday to wind down Fannie Mae and Freddie Mac, recoup taxpayer money spent on bailing out the mortgage giants and transition to full privatization of the U.S. mortgage industry in 10 years.

The proposed bill, under the title of “The Mortgage Finance Act of 2011” would also pay back taxpayers the funds used to place the two entities into conservatorship.

Senator Isakson described The Mortgage Finance Act of 2011 as “a detailed roadmap to change the unsustainable course we’re on in which the American taxpayers have been bailing out the mortgage industry to the tune of hundreds of billions of dollars.”

The draft bill proposes to place Fannie and Freddie into receivership within 18 months, with the receiver “required to maximize the repayment to taxpayers of the full amount of the bailout since 2008.” The bill would also rebrand the two government-sponsored entities as the Mortgage Finance Agency and would charge “guarantee fees” on issuers of qualified mortgage-backed securities. Those fees would be used to fund the agency and a catastrophic fund to cover any losses.