U.S. Treasury Secretary Timothy Geithner announced on Thursday that the Obama administration is still hard at work on an extensive financial plan to overhaul Fannie Mae and Freddie Mac, the two government-sponsored entities that have received more than $151 billion in taxpayer funds since the market downturn in 2008.
Though Geithner stressed that such a plan is a “complicated process” that will not result in any legislation in 2012, he did say that the Treasury plans to release a detailed approach to the GSEs this spring, as he did in February 2011 when he proposed three options for reform for the two firms.
According to a Washington Post article, all three options retained the services of the Federal Housing Administration, but all three also proposed eliminating Fannie and Freddie, though the methods for such an action differed in each plan.
The end goal, regardless of method, is to reduce government presence in the mortgage market, Geithner said.
“Our plan will wind down the GSEs and bring private capital back into the market, reducing the government’s direct role in the housing market and better targeting our support towards first-time homebuyers and low- and moderate-income Americans,” Geithner said.
Since 2008, the government has taken a greater and greater role in the mortgage business, with 9 out of every 10 new loan bearing some form of government support or insurance.
According to a National Mortgage News piece, Geithner plans to work ranking members of the House and Senate banking committees to craft a plan for the GSEs.
“What we’re going to try to do is lay the foundation for consensus,” he said, adding, “there has been some convergence on thinking about alternative models,” for a revised lending environment.