Recently introduced legislation would replace mortgage giants Fannie Mae and Freddie Mac with at least five private companies that would issue mortgagebacked securities with explicit federal guarantees. The legislation’s sponsors, Rep. John Campbell (R., CA) and Rep. Gary Peters (D., MI), feel that the measure is a compromise between conservative Republicans who have advanced bills to build a mostly private mortgage-finance system and Democrats, who say the government shouldn‘t abandon the mortgage market. Like Fannie and Freddie, the new entities would be restricted to buying loans that meet certain standards, including size caps. But the firms would have to hold much more capital than Fannie and Freddie. And only the mortgagebacked securities that they issue—not the companies themselves—would enjoy federal guarantees. The companies would operate more as public utilities and likely wouldn‘t have exchange-listed shares.