A Republican-backed measure to reform the U.S. housing marketwould eliminate Fannie Mae and Freddie Mac and replace them, inpart, with a non-government, not-for-profit entity.

According to an executive summary of the legislation announcedThursday, the “National Mortgage Market Utility would be regulatedby the Federal Housing Finance Administration, but would beforbidden from originating, servicing or guaranteeing any mortgagesor mortgage-backed securities.”

Instead the Utility would act as something like a referee forthe buying and selling of mortgages by developing standard-formmortgage agreements and guidelines for loan- level datadisclosures, the pooling and servicing of loans, representationsand warranties, indemnification and remedies and trusteeresponsibilities.

The Utility would control and own the mortgage loan originationplatform which is currently owned by Fannie Mae and Freddie Mac anduse it as an “open access common securitization platform.”

The platform would allow all qualified mortgages andnon-qualified mortgages of any size to be securitized, according tothe bill, and forbid charging fees based on the size, businessline, composition or loan volume of the issuer.

The bill also would shrink the GSE's portfolio ofmortgage-backed and other securities by 15% per year for five yearsuntil, finally, they would be “stripped of their governmentcharter, liquidated and any remaining assets sold off.”

The Federal Housing Administration's mortgage insurance programwould be targeted at first-time home buyers and moderate- tolow-income borrowers defined as below 115% of area median incomenationwide or 150% of AMI in higher cost areas.

The agency would also not be allowed to insure loans of morethan $625,000 or less than $200,000 and would have to requiregreater down payment, moving it from 3.5% to 5% for first timeborrowers.

“House Republicans are committed to fixing the failed housingfinance system that required the biggest taxpayer-funded bailout ofall time – nearly $200 billion for Fannie Mae and Freddie Mac,”said Financial Services Committee Chairman Jeb Hensarling (R-TX), in a statement about the bill. “Americaneeds a housing policy designed for homeowners and taxpayers – notfor Wall Street and the housing industry,” Hensarling said.

“America needs a housing policy designed to give every Americanwho works hard and plays by the rules both opportunities andchoices to buy a home they can actually afford to keep,” hesaid.

“Our plan helps taxpayers and homeowners. It gives power andcontrol back to consumers,” the Texas Republican said.

“Under the current broken system, unaccountable Washingtonelites have more of a say over who gets a mortgage than your localbank. The current system is a government monopoly run by the sametypes of Washington bureaucrats who run the IRS. America can dobetter. Americans deserve better,” he added.

The Senate also has a bill before it that would eliminateFannie Mae and Freddie Mac.