Obama Administration Planning To Close Fannie Mae And Freddie Mac

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February 3, 2012

New York, February 3 (FinanceEnquiry.com) - Treasury Secretary Timothy F. Geithner announced Thursday that the Obama administration is exploring all options to close down government-backed mortgage giants Fannie Mae and Freddie Mac and to finance the mortgage markets through more private funding. The administration is trying to find suitable legislative options with lawmakers so that the nation’s housing finance system can be properly overhauled.�

Geithner said that it will be a complicated process and will take some time before legislation takes place. Three options for a long-term overhaul of the housing market had been proposed by the administration in a white paper last February. The Federal Housing Authority has been retained in each of those options as it deals with loans to borrowers, who are not in a position to afford sizable downpayments.

Proposals for eliminating Fannie and Freddie have been incorporated in each of the three options. Republicans in Congress agree with the proposal of shutting down the mortgage giants, though they want it to be done sooner than what the administration has planned. Geithner also said Thursday that significant progress had been made by the administration in implementing important aspects of the financial overhaul legislation that was passed in 2010.

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