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This week, Senate Banking Committee Chairman Tim Johnson (D-SD) and ranking member Mike Crapo (R-ID) announced a plan for housing finance reform.

The Johnson-Crapo proposal builds on a plan introduced last year by Sens. Bob Corker (R-TN) and Mark Warner (D-VA) that would wind down Fannie Mae and Freddie Mac and replace them with a new agency, known as the Federal Mortgage Insurance Corporation. This new agency would be modeled after the Federal Deposit Insurance Corporation. Like the Corker-Warner plan, the new agency would guarantee certain mortgages after the first 10 percent of losses on new loans are covered by private capital, according to an outline of the bill.

While the proposal will be marked up in committee, it is unlikely to receive a floor vote this year. However, the legislation, should it pass successfully out of committee, could provide the basis for a bill that could pass next year.