Sen. Bob Corker (R-Tennessee) has introduced a bill aimed at winding down the GSEs by gradually reducing their portfolios and bringing uniform standards to the industry.
Corker also hopes to bring uniformity to the mortgage market through his Residential Mortgage Market Privatization and Standardization Act.
The GSEs currently own or guarantee half of all U.S. mortgages and back 90 percent of all new home loans, costing taxpayers more than $150 billion so far.
""We are no closer to transitioning Fannie Mae and Freddie Mac off government life support than the day the firms were taken under direct government control in 2008,""
said Corker, a member of the Banking, Housing and Urban Affairs Committee.
""We're introducing this bill to lay down a marker and get a conversation going that Washington has put off for far too long,"" he added.
Coker's bill aims to gradually reduce the amount of new mortgage backed securities (MBS) issued by Fannie Mae and Freddie Mac over 10 years. At the end of the 10 year period, the MBS market would be completely private.
The bill also calls for sales of the GSEs' technology and other systems to private investors.
In addition to reducing the role of the GSEs, the bill includes several provisions aimed at bringing uniformity to the market, including uniform underwriting standards, uniform pooling and servicing agreements.
The bill also calls for a new electronic registration system -- referred to as MERS 2 -- which would be overseen by the Federal Housing Finance Agency.
""These are sensible steps that can earn back private capital and ultimately get America's housing market back to fundamentals and away from undo government involvement,"" Coker said of his proposed bill.
Corker's Senate bill follows a similar proposal introduced in the House of Representatives last month by Rep. Scott Garrett (R-New Jersey).