Reform may be on the way for the housing finance system in the United States if a bill cleared by the ""House Financial Services Committee"":http://financialservices.house.gov/ makes its way to the Senate.[IMAGE]
Rep. ""Scott Garrett"":http://garrett.house.gov/ (R-New Jersey) hailed the passage of his legislation ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô the Private Mortgage Market Investment Act ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô which cleared the committee by an 18-15 margin.
If met by a similar proposal by the Senate, the law would eliminate the GSEs by requiring the ""Federal Housing Finance Agency"":http://www.fhfa.gov/ (FHFA) to adopt mortgage servicing rules, establish[COLUMN_BREAK]
mortgage standardization procedures, and ensure a substantive period of analysis for investors.
""When the history books are written, today's vote will mark the beginning of the end for the era of crony capitalism that has defined our country's housing finance system for the past three decades,"" Garrett said in a statement.
""Subcommittee passage of this bill is an important first step to level the playing field so that private market participants can reenter the marketplace and, more importantly, ensure the American taxpayers are never again left holding the bag for costly government bailouts,"" he said.
""By facilitating continued standardization and uniformity, ensuring rule of law and legal certainty, and providing investors with additional transparency and disclosure, the Private Mortgage Market Investment Act will set the rules of the road so that a deep and liquid secondary mortgage market develops in the absence of Fannie Mae and Freddie Mac,"" he added.
The move by Garrett follows a similar push by Sen. ""Johnny Isakson"":http://isakson.senate.gov/ (R-Georgia), who advanced legislation to consolidate assets from the GSEs, abolish federal conservatorship over the next decade, and stand up a Mortgage Finance Agency.