(Fannie Mae and Freddie Mae commentary from Treasury Secretary Tim Geithner included in this update.)WASHINGTON ( TheStreet) -- Now that other major agenda items are on the road to passage, the Obama administration has finally set its sights on the two big, gaping holes in America's balance sheet: Fannie Mae ( FNM) and Freddie Mac ( FRE). Though the mortgage-finance giants stand to vaporize more taxpayer funds than any other bailed-out company, and are hugely important to economic policy goals, little has been said about Fannie and Freddie's future so far. On Tuesday, Treasury Secretary Timothy Geithner spoke in broad terms about the plan for reforming Fannie and Freddie before the House Financial Services Committee. The plan appears to be for another hybrid public-private entity, but one whose government support is explicit, with risk priced more "appropriately" than it has been for decades. "The housing finance system clearly cannot continue to operate as it has in the past," said Geithner, promising "stronger regulation, more effective consumer protections and a clearer role of government with less risk borne by the American taxpayer."
|Treasury Secretary Tim Geithner|