Their bill, the Housing Finance Reform and Taxpayer Protection Act, would replace Fannie and Freddie in order to get government out of the business of mortgage lending because they don’t want profits “to serve as a piggy bank for any of our colleagues pet projects.”

“It’s been five years now and we think it’s time to change the system,” Warner said. “The status quo is just not sustainable.”

After the financial crisis the U.S. government spent nearly $200 billion shoring up the housing lending market, which contributed to the 2008 financial crisis. 

The senators said it was time for a change because the housing market is beginning to recover.

Under their bill there would be a five-year transition period when a new Federal Mortgage Insurance Corporation would replace Fannie and Freddie. Private companies securitizing pools of qualifying mortgages could buy insurance from the new corporation to cover 90 percent of any losses. The senators said that with 10 percent of their own capital at risk, private financiers would have incentives to manage risk more effectively than in the past.

They said housing finance reform was needed because it wasn’t included in the Dodd-Frank financial reform law. 

“Housing is a critically important part of our economy,” Warner said. “This is the time and it’s my hope that the Banking Committee take up this legislation.”

This article was updated at 7:45 p.m.