Kanjorski: Fannie, Freddie Need To Remain

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WASHINGTON-Rep. Paul Kanjorski derided a plan by Republican lawmakers to phase out Fannie Mae and Freddie Mac, insisting to do so would cost the federal government an estimated $1-trillion.

In addition, Kanjorski, the chairman of the House Financial Services Subcommittee on Government Sponsored Enterprises, the function of the two GSEs facilitating a secondary mortgage market would need to be duplicated by some other entity the Republican plan does not include. "We can't just do away with," the Pennsylvania Democrat told NAFCU's annual Congressional Caucus last week.

Kanjorski said if the Democrats retain control of the House in the next Congress they will propose a plan to replace the two mortgage giants "and we're going to have a secondary market." Without a secondary market entity like Fannie and Freddie, he said, "community banks and credit unions wouldn't have access to the market. Several options are being considered, said Kanjorski, who will hold hearings on the issue this fall. Among them: replace the two giants with several smaller entities or assign more of their functions to the private sector.

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