NEW YORK ( TheStreet) -- Shares of bailed-out housing giants Fannie Mae ( FNMA) and Freddie Mac ( FMCC) shed more than 12% each as Senators Bob Corker (R- Tenn.) and Mark Warner (D-Va.) introduced legislation aimed at curtailing the government-sponsored enterprises and allowing private capital to have a greater role in the U.S. housing system. The most liquid junior preferred GSE shares, which have also risen considerably this year, ended modestly lower. Fannie preferred Series S shares (FNMAS), with a face value of $25, closed at $4.94 Tuesday, down about 0.2% .Freddie Mac's preferred Series Z shares (FMCKJ), with a face value of $25, closed at $5.10 Tuesday, down about 1%. Investors have been betting that the housing heavyweights, which have actually become profitable again, will ultimately repay the government and return to their private forms. Junior preferreds is seen as a better bet than common shares, which figure last in the pecking order of who gets repaid. Nonetheless, it was a good day for bank stocks. Shares of Citigroup ( C) and Bank of America ( BAC) rose Tuesday after central banks around the world moved to reassure investors they will not prematurely raise interest rates. In the U.S, strong housing data delivered a shot in the arm to markets that have been in turmoil since Federal Reserve Chairman Ben Bernanke said a week ago that the central bank may begin to curb its bond purchases later this year. Home prices rose 12.1% in the12-months ending in April, according to the S&P Case Shiller 20-City Composite index. The Census Bureau, meanwhile, said new-home sales rose 2.1% in May, higher than expected. Shares of Bank of America rose 3% to $12.67. Shares of Citigroup rose 3.4% to $47. Both banks are considered highly levered to the housing recovery, with higher home prices likely to reduce the likelihood of future defaults. Shares of JPMorgan Chase and Wells Fargo also finished higher by 1%. --Written by Shanthi Bharatwaj in New York.