--- title: Senators Optimistic on Plan to Replace Fannie Mae and Freddie Mac description: Senators are forging ahead with a proposal to wind down the mortgage giants Fannie Mae and Freddie Mac, but it won't be easy canonical: https://time.com/22543/fannie-mae-senate-tim-johnson-mortgages/ author: Alex Rogers article:opinion: false article:content_tier: free article:published_time: 2014-03-12T23:19:45.000Z article:modified_time: 2026-02-21T06:44:15.904Z article:section: Politics og:title: Senators Optimistic on Plan to Replace Fannie Mae and Freddie Mac og:description: Senators are forging ahead with a proposal to wind down the mortgage giants Fannie Mae and Freddie Mac, but it won't be easy og:url: https://time.com/22543/fannie-mae-senate-tim-johnson-mortgages/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt95f64d7111065edb/69868533cd804d0dafcc9b3e/senate-mortgage-reform-tim-johnson.jpeg?branch=production&width=1200&quality=75&auto=webp&crop=16:9 og:image:width: 4000 og:image:height: 2250 og:image:alt: Senator Tim Johnson, chairman of the Senate Banking Committee, left, and Senator Mike Crapo listen during a Senate Banking Committee hearing in Washington, Feb. 27, 2014. og:type: article twitter:card: summary_large_image twitter:title: Senators Optimistic on Plan to Replace Fannie Mae and Freddie Mac twitter:description: Senators are forging ahead with a proposal to wind down the mortgage giants Fannie Mae and Freddie Mac, but it won't be easy twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt95f64d7111065edb/69868533cd804d0dafcc9b3e/senate-mortgage-reform-tim-johnson.jpeg?branch=production&width=1200&quality=75&auto=webp&crop=16:9 ---  # Lawmakers Optimistic About Mortgage Reform Plan > Sponsored content. 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It explains the politics, personalities and power dynamics behind the headlines, twice a week. #### Where can I get analysis of Washington politics by email? D.C. Brief is TIME's free Washington politics newsletter, available at time.com/newsletters. It is written by a TIME senior correspondent who covers the capital full time. #### Who writes TIME's D.C. Brief? Philip Elliott, a senior correspondent at TIME, writes D.C. Brief. #### Is D.C. Brief free? Yes. D.C. Brief is free at time.com/newsletters. ### Sources * TIME Newsletters: [time.com/newsletters](/c/time-nl-dcbrief-2026q3/newsletters?i=d071a0d3-7673-4cee-9658-ec6af2c53f57&cr=time-nl-dcbrief-2026q3-v1) by [Alex Rogers](https://time.com/author/alex-rogers/) ## Alex Rogers Mar 12, 2014 11:19 PM UTC  Senator Tim Johnson, chairman of the Senate Banking Committee, left, and Senator Mike Crapo listen during a Senate Banking Committee hearing in Washington, Feb. 27, 2014. Senator Tim Johnson, chairman of the Senate Banking Committee, left, and Senator Mike Crapo listen during a Senate Banking Committee hearing in Washington, Feb. 27, 2014. Andrew Harrer—Bloomberg/Getty Images by [Alex Rogers](https://time.com/author/alex-rogers/) ## Alex Rogers Mar 12, 2014 11:19 PM UTC Lawmakers said they were hopeful Wednesday that a plan to ultimately replace government-backed mortgage giants Fannie Mae and Freddie Mac and overhaul the nation’s $10-trillion mortgage market will get a vote in the Senate this year, despite an uphill political battle ahead. The proposal by Senate Banking Committee Chairman Tim Johnson and Ranking Republican member Mike Crapo has the support of the White House, but obstacles remain, including from liberal Democrats, the GOP-controlled House, and lobbyists for Fannie and Freddie. Those companies have seen their share prices [plummet](http://www.bloomberg.com/news/2014-03-11/senators-release-details-of-new-bill-eliminating-fannie-mae.html) since an outline of the reform plan was released Tuesday; actual legislative language will be released in the coming days. “I’m optimistic this could be the year to get it done,” said Sen. Mike Johanns (R-Neb.), a member of the Banking committee. “I think it is one of the few bills that could actually get to the floor and move with a bipartisan vote.” “I like what I hear,” said Sen. Joe Manchin (D-W.Va.), another Banking committee member. “It’s going to be great.” The proposal would wind down and replace Fannie and Freddie—which have long provided an implicit government guarantee to a vast swath of mortgage loans—with the Federal Mortgage Insurance Corp, a system of federally insured mortgage securities through which private insurers wouldn’t receive a government backstop until they took initial losses on mortgage loans. The proposal would also require new underwriting standards, mandating a five-percent down payment for all but first-time home buyers. The proposal comes after a series of hearings last fall and “dozens” of staff-level briefings, according to a Senate Banking Committee aide. Fannie Mae and Freddie Mac have been extraordinarily profitable since 2008, when the federal government seized them to stabilize a market beset by subprime loans that went bad and helped tank the economy. The White House announced on Monday that the companies could send more than $179 billion in profits to taxpayers over the next 10 years if the terms of their bailout remain intact, more than triple the estimate last year, [Reuters](http://www.reuters.com/article/2014/03/10/us-usa-fiscal-fanniefreddie-idUSBREA2914M20140310) reports. Fannie and Freddie together own or guarantee about 60 percent of existing mortgages. There are significant challenges ahead to complete what White House spokesman Bobby Whithorn called “the biggest remaining piece of post-recession financial reform.” The initial reaction from Senate Democratic leadership was lukewarm, though a Senate aide told TIME that the chances of legislation hitting the floor are “likelier than not.” “If there was ever a bill where the devil was in the details, this is it,” New York Sen. Chuck Schumer, a member of the Democratic leadership team and the Banking committee, said in a statement. While Schumer said that the principles of reform “seem reasonable,” his staff would not elaborate on any potential sticking points at this time. Senate Democrats on the Banking committee, including Elizabeth Warren of [Massachusetts](http://topics.bloomberg.com/massachusetts/) and Sherrod Brown of [Ohio](http://topics.bloomberg.com/ohio/), have said they won’t back a plan unless it “guarantees affordable loans for most buyers and includes significant support for low-income rental housing,” according to [Bloomberg](http://www.bloomberg.com/news/2014-03-11/senators-release-details-of-new-bill-eliminating-fannie-mae.html). And it remains unclear if it could ever gain traction in the Republican-controlled House, especially in an election year. “I am skeptical of any approach that does not end the permanent government guarantee in the secondary mortgage market,” Texas Republican Rep Jeb Hensarling, who chairs the House Financial Services Committee, said Tuesday. “Such an approach could very well perpetuate the cycle of boom, bust and bailout we tragically just witnessed.” Consumer activist Ralph Nader said Wednesday on [CNBC](http://video.cnbc.com/gallery/?video=3000255975) that the bill is “dead in the water” unless the real estate and housing lobby support it. Sen. John McCain (R-Ariz.), who enthusiastically supports the plan, echoed Nader’s sentiment. “Never underestimate the lobbying power of Fannie and Freddie,” he said. ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/22543/fannie-mae-senate-tim-johnson-mortgages/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/22543/fannie-mae-senate-tim-johnson-mortgages/"},"headline":"Lawmakers Optimistic About Mortgage Reform Plan","datePublished":"2014-03-12T23:19:45.000Z","dateModified":"2026-02-21T06:44:15.904Z","description":"A pair of senators are hopeful their proposal to wind down government-backed mortgage giants Fannie Mae and Freddie Mac will be put to a vote in the Senate this year, but they face an uphill struggle","url":"https://time.com/22543/fannie-mae-senate-tim-johnson-mortgages/","keywords":["Congress","Senate"],"thumbnailUrl":"https://static.time.com/v3/assets/bltea6093859af6183b/blt95f64d7111065edb/69868533cd804d0dafcc9b3e/senate-mortgage-reform-tim-johnson.jpeg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","author":[{"@type":"Person","name":"Alex Rogers","jobTitle":null,"url":"https://time.com/author/alex-rogers/"}],"articleSection":"Politics","image":[{"@type":"ImageObject","url":"https://static.time.com/v3/assets/bltea6093859af6183b/blt95f64d7111065edb/69868533cd804d0dafcc9b3e/senate-mortgage-reform-tim-johnson.jpeg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","width":1200,"height":675,"headline":"Senator Tim Johnson, chairman of the Senate Banking Committee, left, and Senator Mike Crapo listen during a Senate Banking Committee hearing in Washington, Feb. 27, 2014.","caption":"Senator Tim Johnson, chairman of the Senate Banking Committee, left, and Senator Mike Crapo listen during a Senate Banking Committee hearing in Washington, Feb. 27, 2014.","creditText":"Andrew Harrer—Bloomberg/Getty Images","representativeOfPage":true}],"publisher":{"@type":"Organization","name":"Time","url":"https://time.com/","logo":{"@type":"ImageObject","url":"https://time.com/images/logo.png","width":528,"height":156},"foundingDate":"March 3, 1923","sameAs":["https://www.facebook.com/time","https://www.instagram.com/time/?hl=en","https://twitter.com/time","https://www.pinterest.com/timemagazine"]}},{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"/section/politics/","name":"Politics"}},{"@type":"ListItem","position":2,"item":{"@id":"/tag/congress/","name":"Congress"}},{"@type":"ListItem","position":3,"item":{"@id":"https://time.com/22543/fannie-mae-senate-tim-johnson-mortgages/","name":"Lawmakers Optimistic About Mortgage Reform Plan"}}]}] ```