US home loan firms face axe

City A.M. Reporter
US HOUSE Republicans yesterday unveiled draft legislation that would wind down housing finance companies Fannie Mae and Freddie Mac over a five-year period and sharply reduce the government’s role in the mortgage market.

The sweeping proposal aims to establish a new framework for the housing finance system.

It would replace the companies with a non-profit, utility-like platform that investors would use to securitise mortgages without a government guarantee, essentially replacing the business model that has been a staple of the 30-year fixed rate mortgage.