WASHINGTON — A top lawmaker on Capitol Hill is calling for the elimination of mortgage finance companies Fannie Mae and Freddie Mac and the establishment of a new system to provide money for U.S. home loans. Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee, said Friday he supports replacing the two companies entirely.
“I believe this committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance,” Frank said at a hearing on executive compensation issues. “That’s the approach, rather than the piecemeal one.”
The two companies, which have been run by the government since they almost collapsed in September 2008, have required $111 billion in federal aid to stay afloat.
Late last year the Obama administration pledged to cover unlimited losses through 2012 for both companies, lifting an earlier cap of $400 billion. The Associated Press
