Lawmakers Weigh Future Of Fannie, Freddie
LINDA WERTHEIMER, host:
In Congress, lawmakers are trying to figure what to do with housing giants Fannie Mae and Freddie Mac. Since the government-sponsored enterprises nearly collapsed in 2008, the Treasury has spent more than $125 billion bailing them out.
NPR's Audie Cornish reports.
AUDIE CORNISH: Since the government took over Fannie Mae and Freddie Mac, there has been little talk of how to restructure or even replace them. These days the companies back more than two-thirds of all mortgages and manage the Obama administration's loan modification program for troubled homeowners.
House Financial Services Committee Chair Barney Frank.
Representative BARNEY FRANK (Democrat, Massachusetts): We have two jobs here: one is to figure out the best way to wind down Fannie Mae and Freddie Mac. But an equally important job is to decide what goes in their place.
CORNISH: Republicans like Jeb Hensarling see little good in such government-sponsored enterprises.
Representative JEB HENSARLING (Republican, Texas): Ultimately, the story of the GSEs is one of enriched executives, cooked books, political bullying, a massively inflated housing bubble, millions of home foreclosures, a shattered economy, and the mother of all taxpayer bailouts.
CORNISH: GOP lawmakers are ready to phase out Fannie and Freddie. But Treasury Secretary Timothy Geithner said not so fast.
Secretary TIMOTHY GEITHNER (U.S. Treasury Department): That would not be responsible. One could not defend that. But I think we need to be very careful as we work together to design the future of the American housing finance system. We preserve what was good, but we end what was too risky.
CORNISH: Geithner called the company's hybrid of private shareholders and quasi-public status an unhealthy combination. He would not say when the administration would release a plan to fix the system.
Audie Cornish, NPR News, the Capitol.
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