Senator Toomey Proposes Framework For Ending GSE Conservatorship

U.S. Senate Banking Committee Ranking Member Pat Toomey (R-PA) proposed a framework to end the conservatorship of the government-sponsored enterprises ("GSEs").

The guiding principles are as follows:

• transition from the GSE "duopoly" towards a competitive secondary market that incorporates other sources of private capital that bear mortgage credit;
• end the conservatorship of Fannie Mae and Freddie Mac;
• foster a liquid secondary mortgage market that provides affordable long-term fixed-rate mortgage loans, including 30-year loans;
• ensure that "significant" first-loss private capital stands in front of government support, and that taxpayers are "appropriately" compensated for such support;