WASHINGTON (Reuters) - The next head of a key U.S. congressional committee overseeing banks and housing finance told Reuters on Wednesday that mortgage giants Fannie Mae and Freddie Mac should be in liquidation, not conservatorship.
With Republicans capturing control of the House of Representatives in Tuesday’s elections, Spencer Bachus is expected to take over the chairmanship of the House Financial Services Committee, replacing Democrat Barney Frank.
In an interview, Bachus put reforming Fannie MaeFNMA.OB and Freddie MacFMCC.OB at the top of his priorities list. He will face an uphill climb against Senate Democrats and the Obama administration, whose housing goals are different.
Fannie Mae and Freddie Mac, known as government-sponsored enterprises, or GSEs, were seized by the government at the height of the 2007-2009 financial crisis and are now under direct government management. “They’re in a conservatorship and they really ought to be in a liquidation,” Bachus said.
A top objective for the committee under his leadership will be “ending the bailout of Fannie and Freddie,” he said.
“The Democrats haven’t addressed the need for a long-term plan to transition into a private market ... Long-term we need to return to a private market,” said the Alabama lawmaker, adding that he sees Tuesday’s election results as a sign that voters favor privatizing housing finance, as well.
Reporting by Kevin Drawbaugh; editing by Chris Wilson