Treasury Secretary Tim Geithner told lawmakers that the government should play a role in any new system of housing finance according to MSNBC.com. Geither also believes that Fannie Mae and Freddie Mac should not be fully nationalized and that the central role the housing sector plays in the U.S. economy and its vulnerability to financial shocks justifies a degree of government backing. These comments have followed by calls by other lawmakers to phase out Fannie Mae and Freddie Mac.
This looks to be the first step in a long debate on how to build a system to ensure a liquid source of home mortgage finance.