Sen. Johnny Isakson (R-Georgia) has thrown yet another idea into the mix for reforming the housing finance system.
[IMAGE]Isakson, himself a former real estate agent for 30 years, introduced legislation Thursday that would wean the secondary market off government support and pay taxpayers back for the bailout of ""Fannie Mae"":http://www.fanniemae.com and ""Freddie Mac"":http://www.freddiemac.com.
Isakson's bill would replace Fannie and Freddie with a new, temporary government-backed program to securitize high-quality mortgages, the senator explained. The legislation mandates that this transitional program be turned over to the private sector after 10 years.
[COLUMN_BREAK]The bill also creates a mechanism to repay taxpayers for the full amount of bailout money that’s been funneled to Fannie Mae and Freddie Mac since the two mortgage financiers were placed into conservatorship in September 2008. So far, the GSEs have required just over $150 billion in taxpayer support.
In addition, the legislation creates a new, self-funding catastrophic fund which Isakson says will protect taxpayers from having to bail out another housing collapse during the 10-year transition period before the new government-backed securitization entity is privatized.
“This legislation is 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,†Isakson said. “My bill will shut down Fannie Mae and Freddie Mac through an orderly transition, and it will repay the taxpayers.â€Â
Isakson spent more than three decades in the real estate business, beginning his business career in 1967 when he opened the first Cobb County, Georgia office of a small, family-owned real estate business, Northside Realty. Isakson later served as president of Northside for 20 years.
The full text of Isakson’s Mortgage Finance Act of 2011 is ""available online"":http://isakson.senate.gov/documents/Isakson_Mortgage_Finance_Act.pdf.