Drawing on more than 30 years of experience in the real estate industry, U.S. Sen. Johnny Isakson, R-Ga., introduced legislation that gets taxpayers out of the business of bailing out the mortgage industry by winding down Fannie Mae and Freddie Mac and creating a new transitional program to securitize high-quality mortgages. The legislation creates a mechanism to pay back taxpayers for the bailout of Fannie Mae and Freddie Mac and mandates that the transitional program be turned over to the private sector after 10 years.
“This legislation is a detailed roadmap to change the unsustainable course we’re on in which the American taxpayers have been bailing out the mortgage industry to the tune of hundreds of billions of dollars. My bill will shut down Fannie Mae and Freddie Mac through an orderly transition, and it will repay the taxpayers,” Isakson said. “I invite my colleagues in Congress, both Democrat and Republican, to move this bill forward to strengthen our nation’s housing finance system and our nation’s economy.”
Specifically, Isakson’s bill:
- Shuts down Fannie Mae and Freddie Mac;
- Creates a new transitional program to guarantee securitizations of high-quality mortgages for a 10-year period after which the new operation shall be privatized;
- Creates a new, self-funding catastrophic fund to protect taxpayers from having to bail out another housing collapse during the 10-year transition period before privatization;
- Pays back the American taxpayer for the cost of the Fannie Mae and Freddie Mac bailout; and
- Shuts down the new transitional program completely within 10 years and turns it over fully to the private sector.
Isakson spent more than three decades in the real estate business, beginning his business career in 1967 when he opened the first Cobb County, Ga., office of a small, family-owned real estate business, Northside Realty. Isakson later served as president of Northside for 20 years, presiding over the company’s growth into the largest independent residential real estate brokerage company in the Southeast and one of the largest in America.