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WASHINGTON – The Obama brass wants legislature to approve governing within digit eld that overhauls Fannie Mae and Freddie Mac, the nation's Brobdingnagian but financially feeble structure mart giants, Treasury Secretary Timothy Geithner is informing lawmakers.

In remarks embattled for conveying weekday to the House Financial Services Committee, Geithner says failure to act by then would exacerbate mart jitters and leave earnest problems unaddressed. But in an manifest warning to whatever Republicans who poverty to quickly pull the polity discover of its persona in activity the mortgage system, he's also warning that acting likewise alacritous would hurt too.

"While we are confident that the steps we hit ordered discover follow the correct path, haste would be counterproductive — mayhap destabilizing the structure direction mart or modify disrupting the broader recovery," Geithner says.

The Treasury chief's evidence comes less than threesome weeks after the brass released a inform occupation for a ordering backwards of Fannie and Freddie and much of the rest of the federal persona in housing, a impact the brass has said should become gradually over individual years. Geithner's setting of a instance inclose for the upkeep governing underscores President Barack Obama's desire to start the measure on whatever of those changes.

"Reforming our country's structure direction mart is an essential part of our broader efforts to support ensure Americans module never again undergo the consequences of a preventable scheme crisis," Geithner says.

It's blurred whether major governing much as this could be authorised during incoming year's presidential election campaign, when partisan divisions heighten.

Fannie and Freddie indorse or possess most half of all U.S. mortgages. Along with another federal agencies, they played a persona in nearly 9 of 10 newborn mortgages over the time year, as clannish lenders hit remained troubled most making newborn loans. The digit companies nearly collapsed in 2008 as the structure mart crumbled, but hit been kept alive with $150 billion — so far — in taxpayer dollars.

Congress is disagreeable to end how to reshape the federal persona in the structure market, which relic weak, with low prices and Brobdingnagian drawing of foreclosures in Florida, parts of the Southwest and another regions. While both semipolitical parties grant that changes are necessary to protect taxpayers and restore clannish lending, Republicans tend to poverty to advise more strongly patch Democrats express more concerns most maintaining the government's persona in serving lower-income families.

To twine down Fannie's and Freddie's roles in the market, the brass also wants to take steps for which it does not need congressional action, much as detractive the filler of loans the digit companies may buy. Geithner also reiterated brass plans to constrict the Federal Housing Administration's persona in making loans. Some Democrats and consumer advocacy groups hit complained that much actions module attain it harder for whatever families to acquire homes.

The administration's inform offered threesome options for overhauling Fannie and Freddie. One would limit the polity to serving slummy and middle-class borrowers finished agencies same the FHA. The second would hit the polity backwards clannish mortgages, but mostly during times of scheme crisis. The third would hit the polity "reinsure" whatever mortgage investments that are already secure by clannish insurers.

The digit companies acquire mortgages from banks and another primary lenders, collection them together and sell them with a indorse that investors would be repaid in housing of default. That grouping helps keep interest rates lower and provides lenders with fresh change to attain added loans.

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