Bill > HR1224

This bill, the GSE Portfolio Risk Reduction Act of 2011, amends the Housing and Community Development Act of 1992 to impose strict limits on the amount of mortgage assets that government-sponsored enterprises (GSEs), specifically Fannie Mae and Freddie Mac, can own. These GSEs are government-backed entities that play a significant role in the housing market by buying mortgages from lenders, packaging them into securities, and selling them to investors. The bill mandates a phased reduction in their mortgage asset holdings over five years, starting with a limit of $700 billion one year after enactment, decreasing to $250 billion five years after enactment. "Mortgage assets" are broadly defined to include mortgages, mortgage loans, mortgage-related securities, and similar financial instruments that would appear on their balance sheets according to generally accepted accounting principles as of September 7, 2008, with no changes to certain accounting standards after that date. The purpose of these limitations is to reduce the risk associated with the portfolios held by these GSEs.