The compromise emerging from the Senate Banking Committee on winding down mortgage giants Fannie Mae and Freddie Mac is a "Goldilocks deal"—it's just right, Sen. Bob Corker told CNBC on Thursday.
The bill originally introduced by the Tennessee Republican and Sen. Mark Warner, D-Va., and co-sponsored by a bipartisan group of 10 senators will serve as the base text for the committee's housing finance reform efforts.
This may be the biggest thing Congress does this year "that actually matters," Corker said in a "Squawk Box" interview. This is a "too big to fail" scenario if there's ever been one, he added.
When Fannie and Freddie ran into trouble in the midst of the 2008 financial crisis, the government put forward $187.5 billion to bail them out. Lawmakers from both parties want to revamp the $10 trillion mortgage market to make it less likely taxpayers will ever be put on the hook again.
Corker said Thursday he's confident that legislation to phase out Fannie and Freddie and replace them with a new government reinsurer will pass in the Senate. The proposed Federal Mortgage Insurance Corporation reinsurer would only provide assistance, after private creditors had taken a hit. The entity would be financed by fees on lenders who want the government backstop.
This framework would move away from the "private gain, public loss scenario," Corker said.