Politics: Fannie, Freddie Fix May Not Come Quick

Whenever fear lurks in the financial markets, as we saw last week with insolvency news on Fannie Mae (FNM Quote) and Freddie Mac (FRE Quote), politicians line up to make positive-sounding statements.

For the Republicans, President George Bush and Treasury Secretary Henry Paulson offered a plan to rescue the mortgage giants.

On the Democratic side, Majority Leader Harry Reid (D., Nev.) said his party's representatives in the Senate "stand ready to work with the Administration to quickly and effectively address the situation currently facing these institutions."

But don't hold your breath expecting immediate action; Congress hasn't even passed the housing bill after debating the rescue for a year.

The subprime mortgage mess erupted last year in August with collateral damage continuing a year later, claiming mortgage lenders like IndyMac(IMB Quote) on Friday. Aside from minor modifications, Congress and the Bush administration have yet to remedy the bleeding in the housing markets. When will talk translate into action?

While House Speaker Nancy Pelosi (D., Calif.) has not commented on the Treasury plan yet; Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee, spoke today on CNBC about the new funding available through the Federal Reserve discount window. "I don't think they [Fannie and Freddie] need to access the window," he said. "It is important for people to know the window is there. They are fundamentally sound."

It doesn't sound as if Chairman Frank believes the mortgage giants need immediate support, despite the unusual steps taken by the Treasury. Frank remains focused on passing the housing bill, which he sees as an important step in resolving the housing crisis. He expects that bill to pass the House at the end of next week.