Romney Calls for GSE Reform But Avoids Specifics

WASHINGTON — Republican presidential candidate Mitt Romney is calling for reform of Fannie Mae and Freddie Mac, promising it will be a priority if he wins the November election.

In a housing policy statement released late Tuesday, Romney blamed the government-sponsored enterprises for the financial crisis, saying they were at the "center" of the problems.

"Mitt Romney will reform these government-sponsored companies to protect taxpayers from additional risk in the future by ensuring taxpayer dollars in the housing market are replaced with private dollars," the statement said.

Still, the statement did not provide any specifics for how the GSEs would be reformed. Even if Republicans assumed control of both the White House and Congress, they would face a sharp divide within their own party on how to proceed. While conservatives like vice presidential candidate Paul Ryan favor full privatization of the GSEs, that idea is vigorously opposed by the housing industry, which has substantial sway with moderate GOP members.

The Obama administration, too, has yet to unveil a concrete proposal for how to reform the GSEs. Fannie and Freddie were seized by the government four years ago this month.

In the statement, Romney blamed the Obama administration for producing "more than 8,000 pages of new rules and regulations" in the wake of the financial crisis.

"The problem is that they are poorly designed and have made it harder for people with good credit to get loans," the statement said. "Mitt Romney will put in place smarter regulations to restore a functioning marketplace that holds banks accountable and restart lending to creditworthy borrowers."

The statement said that in his first term — in addition to reforming the GSEs and revamping regulations — a Romney administration would sell the 200,000 vacant foreclosed homes owned by the government and facilitate foreclosure alternatives for troubled borrowers.