Some members of Congress from North Carolina are getting behind proposals to dismantle mortgage giants Fannie Mae and Freddie Mac.
The companies got a $190 billion bailout during the housing crisis and were absorbed by the federal government. Sen. Kay Hagan (D-NC) is co-sponsoring a bipartisan bill that would gradually break down Fannie and Freddie in favor of a private reserve of mortgage funds.
"So as they wind down, there are provisions in this bill to ensure that institutions of all sizes -- not just the mega-banks, but local banks and credit unions -- will also have direct access to this secondary market so that you can get a mortgage in your local community," Hagan says.
Critics of that proposal say it gives too much access to large banks, which would lead to less competition and higher costs for people who want to buy a house.
The bill would transfer current regulators to a new agency that would provide emergency funds if the private sector can not support another housing crisis. North Carolina Congressman Mel Watt was nominated to be the new leader of the Federal Housing Finance Agency earlier this year. Sen. Richard Burr (R-NC) was not available for comment.
The House is considering a similar bill from Republicans that would provide less of a government fallback during a potential crisis.
