WASHINGTON — Fannie Mae and Freddie Mac should be eliminated in their current form by lawmakers, who must design a new way to finance the U.S. housing market, House Financial Services Chairman Barney Frank said Friday.

"As I believe this committee will be recommending, abolishing Fannie Mae and Freddie Mac in their present form and coming up with a new whole system of housing finance (is in order)," the Massachusetts Democrat said at a hearing.

The two mortgage finance firms are currently controlled by the government, which was forced to take them over to avoid their collapse in September 2008.

The Obama administration has said it plans to release a proposal for what to do with the firms later this year.

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