Senators Mull Plan To Abolish Fannie Mae

U.S. senators are giving final touches to a proposal to liquidate the state-owned mortgage giants, Federal National Mortgage Association (OTCBB:FNMA) (Fannie Mae) and Federal Home Loan Mortgage Corp (OTCBB:FMCC) (Freddie Mac), and substitute them with a government re-insurer of mortgage securities backed by private capital. According to Bloomberg news, the proposal is expected to be introduced during this month and is considered as the first serious bipartisan effort to shape a new housing finance system. The proposed legislation could, at base-minimum, set-off the process for a full-debate that could subsequently go to the Congress. Bruce Bekrowitz’s Fairholme Capital and other…