A proposal from the Bipartisan Policy Center calls for reducing the role of Fannie Mae and Freddie Mac in housing finance. Instead, the center's Housing Commission proposes a public guarantor that would intercede only in catastrophic circumstances, leaving most losses to be absorbed by the private sector, which would have originated financing. The U.S. needs "a whole series of banks, community banks and credit unions playing key roles and the government staying way back," said Henry Cisneros, former Housing and Urban Development secretary and a co-chairman of the panel.

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