WASHINGTON — Rep. Scott Garrett, a New Jersey Republican who chairs the House subcommittee with jurisdiction over Fannie Mae and Freddie Mac, plans to unveil a comprehensive bill to reform the secondary mortgage market on Thursday.
Garrett, a critic of the government's role in the U.S. housing finance system, said in a press release that the proposal will ensure robust private investment in the mortgage market without a government backstop.
The legislation follows the approval by Garrett's subcommittee of 14 smaller Republican bills aimed at chipping away at the dominant position that Fannie and Freddie hold in the secondary mortgage market.
Garrett's new bill will address the question of how the role of Fannie and Freddie should be filled, according to Garrett spokesman Ben Veghte. "How do you facilitate the private markets to step in?" he asked.
Among House Republicans, there is a split over whether the extent to which the government should continue to play a role in the housing finance system. It is unclear whether Garrett's proposal could attract the support of some Republicans, such as California Rep. John Campbell and West Virginia Rep. Shelley Moore Capito, who take less of a hard line on scaling back the government's role than Garrett does.
For Garrett, strong support from his fellow Republicans will be crucial, because his proposal seems highly unlikely to attract any significant support from House Democrats.
Garrett plans to release his proposal at a 9:45 a.m. press conference on Thursday.
