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» VISIT US ONLINE @ DSNEWS.COM 13 THE LEADER IN DEFAULT SERVICING NEWS Help shape the next issue of DS News. Drop us a line at Editor@DSNews.com. SENATORS CALL FOR BIG CHANGES TO GSES Two senators are drafting legislation that could potentially break up Fannie Mae and Freddie Mac, Bloomberg reported recently. In a bipartisan effort between Sen. Bob Corker (R-Tennessee) and Sen. Mark Warner (D-Virginia) that started earlier this year, the two officials are looking to put an end to the enterprise's overwhelming command of the secondary mortgage market and create more competition. ere have been murmurs of GSE reform in Washington ever since the U.S. government acquired the enterprises back in 2008 after the housing market crash. How do they plan on increasing competitiveness in the marketplace? One idea is to separate Freddie's and Fannie's single- family businesses from their multifamily ones. If need be, their single-family businesses could be broken up even further. However, this feat might be easier said than done. According to the Bloomberg article: "Breaking up Fannie and Freddie would face logistical hurdles. In the past, business separations in other industries have sometimes fallen along regional lines, but that might not work for mortgage companies whose viability depends on a broad geographic footprint. Other issues a bill might have to address include how to split up employees, intellectual property, and what would happen to the guarantees the companies issue on mortgage- backed securities during any transition." ere is the chance the legislation could fail to get traction in the Senate, as most members have their sights on more big- picture legislation, such as healthcare and tax reform—both of which have gotten off to rocky starts. Treasury Secretary Steven Mnuchin has repeatedly said that he plans to focus on Freddie Mac's and Fannie Mae's future in the second half of 2017. Corker and Warner's joint legislation could be the first step in that discussion.

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