Paulson Says Fannie, Freddie Need to Change

Paulson says changes needed at Fannie, Freddie By Martin Crutsinger

WASHINGTON -- Treasury Secretary Henry Paulson said Wednesday that allowing mortgage giants Fannie Mae (FNM Quote) and Freddie Mac (FRE Quote) to return to their old operating ways is not an option.

Congress and the next administration must decide the proper role government should play in supporting home ownership in light of the severe economic costs imposed on the nation from the bursting of the housing bubble, Paulson said.

The government in September took control of Fannie and Freddie, placing them in conservatorship. Paulson offered thoughts on a variety of possible solutions on what should follow that move, but did not endorse any. ...