WASHINGTON, Jan 24 (Reuters) - The Obama administration is likely to include several broad options for reforming the U.S. housing finance system when it releases a long-awaited 'white paper' next month, sources knowledgeable with the plans said on Monday.
The white paper, which was originally due this time last year, was postponed for 12 months to give breathing room to the still-struggling U.S. housing finance market, which has been leaning heavily on taxpayer funds for support.
The future role of ailing mortgage finance giants Fannie Mae and Freddie Mac will be a key question tackled in the proposals.
The two congressionally chartered firms have taken more than $150 billion in direct taxpayer aid since the Bush administration seized them in late 2008 as losses on bad mortgage loans mounted. The move was meant to be temporary.
Many Republican lawmakers want the two firms to be fully privatized, while Democrats typically see a need for the government to continue to offer at least some type of support for homeownership.
Republican Representative Jeb Hensarling said last week he would soon reintroduce a bill to wind the companies down within five years.
Treasury Secretary Timothy Geithner has held his cards close to the vest, but said last August that he sees a role for government-backed mortgages 'even in future economic downturns.'
Among possible solutions would be the creation of a host of firms to replace the role that Fannie and Freddie play in the housing market -- guaranteeing mortgages that meet a certain standard so they can be sold to investors -- without backing the firms themselves.
The administration's white paper is expected to be released before U.S. President Barack Obama unveils his budget proposal in mid-February, though the timing is not set in stone.
'We are in the homestretch of making final policy decisions and we will put this out as soon as it is ready,' an Obama administration official said.
((Reporting by Corbett B. Daly; Editing by Gary Crosse)) Keywords: USA HOUSING/MORTGAGES (corbett.daly@thomsonreuters.com; +1-202-898-8442; Reuters Messaging: corbett.daly.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The white paper, which was originally due this time last year, was postponed for 12 months to give breathing room to the still-struggling U.S. housing finance market, which has been leaning heavily on taxpayer funds for support.
The future role of ailing mortgage finance giants Fannie Mae and Freddie Mac will be a key question tackled in the proposals.
The two congressionally chartered firms have taken more than $150 billion in direct taxpayer aid since the Bush administration seized them in late 2008 as losses on bad mortgage loans mounted. The move was meant to be temporary.
Many Republican lawmakers want the two firms to be fully privatized, while Democrats typically see a need for the government to continue to offer at least some type of support for homeownership.
Republican Representative Jeb Hensarling said last week he would soon reintroduce a bill to wind the companies down within five years.
Treasury Secretary Timothy Geithner has held his cards close to the vest, but said last August that he sees a role for government-backed mortgages 'even in future economic downturns.'
Among possible solutions would be the creation of a host of firms to replace the role that Fannie and Freddie play in the housing market -- guaranteeing mortgages that meet a certain standard so they can be sold to investors -- without backing the firms themselves.
The administration's white paper is expected to be released before U.S. President Barack Obama unveils his budget proposal in mid-February, though the timing is not set in stone.
'We are in the homestretch of making final policy decisions and we will put this out as soon as it is ready,' an Obama administration official said.
((Reporting by Corbett B. Daly; Editing by Gary Crosse)) Keywords: USA HOUSING/MORTGAGES (corbett.daly@thomsonreuters.com; +1-202-898-8442; Reuters Messaging: corbett.daly.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.