US Rep Frank sees ending Fannie Mae, Freddie Mac in current form

By Reuters Staff
January 22, 2010

WASHINGTON, Jan 22 (Reuters) – Mortgage giants Fannie Mae and Freddie Mac are likely to be abolished in their current form, a key lawmaker in the U.S. House of Representatives said on Friday.

“I believe this committee will be recommending abolishing Fannie Mae and Freddie Mac in its current form and coming up with a whole new system of housing finance. That is the approach rather than the piecemeal one,” said Representative Barney Frank, chairman of the powerful House Financial Services Committee and a Massachusetts Democrat.

Frank made the comments at hearing on executive compensation.    He later told reporters he will hold hearings on the housing finance market and then move to a restructuring of Fannie Mae and Freddie Mac. He said he would look at Federal home loan banks and the structure of the Federal Housing Administration and Ginnie Mae.

Treasury Secretary Timothy Geithner on Thursday said the Obama administration is committed to “reforms” of the GSEs, but said it would likely not be until 2011 until substantive changes are made.

“I don’t think we’re going to be able to legislate that until that process can start, until next year, because it’s just a complicated thing to get right,” Geithner said in an interview with PBS Television.

“But we are completely supportive and agree completely with the need to make sure that we take a cold, hard look at what the future of those institutions should be in our country,” Geithner said.

(Reporting by Rachelle Younglai and Corbett B. Daly; Editing by Andrew Hay) ((corbett.daly@thomsonreuters.com; +1-202-310-5487)) ((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com

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