The Senate Banking Committee on May 15 passed a bill that would dissolve Fannie Mae and Freddie Mac.
However, the measure did not attract a large enough majority and is unlikely to reach the Senate floor this year. Proponents failed to win over a key bloc of liberal Democrats, and Senate Majority Leader Harry Reid (D-Nev.) is unlikely to move the measure to the full chamber without their support.
Democrats who voted against the bill were concerned about limiting access to affordable housing and enabling a few Wall Street players to dominate the mortgage market, while Republican opponents said it was too complex and still kept taxpayers on the hook. The Obama administration backed the measure. Many housing analysts believe the chances of winding down the mortgage finance giants could erode even further next year after the November midterm elections if Democrats lose control of the Senate.