Fannie, Freddie Reform Plan Pushed Back
WASHINGTON ( TheStreet) -- The federal government has again extended the horizon for meaningful reform of Fannie Mae (FNM) and Freddie Mac's (FRE) business model, another sign that the firms are too interwoven with current policy to change the status quo and that their problems are too complex to resolve overnight.
Appearing before the House Budget Committee on Wednesday, Treasury Secretary Timothy Geithner said the plan for Fannie and Freddie will not be outlined until 2011. The government will release a set of "principles and broad objectives" sometime this year, according to Geithner, which will be open for public comment.
In late December, the Obama administration said it expected to unveil a Fannie-Freddie strategy as part of the 2011 budget. But the White House subsequently backed off that plan, releasing a budget proposal on Feb. 1 with no mention of mortgage-finance reform.
Some Republican lawmakers have been critical of the delay, which has offered both political opponents and the private industry a chance to put forward their own ideas of reform. Still, there appears to be no consensus on the best path forward and Geithner predicted that the Fannie-Freddie plan will be "a difficult set of reforms" to push through Congress, whose partisan fever has deadlocked other important bills in recent months.Some liberal lawmakers, including House Financial Services Committee Chairman Barney Frank (D., Ma.), seem to favor a plan that keeps the government deeply involved in housing, and supportive of affordable housing for low-income families. Some conservatives would rather do away with Fannie and Freddie altogether, and let the private market take care of mortgage financing on its own, without a government guarantee.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV