Fight now looms over Fannie, Freddie

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The fight over the changes to U.S. financial regulation was bruising.

The coming debate over what to do with Fannie Mae and Freddie Mac promises to be even more contentious.

The revamp of the nation’s financial infrastructure, which will be signed into law next week by President Barack Obama, didn't address the fate of the mortgage-finance giants that helped fuel the housing bubble and were taken over by the government in 2008. So far, the U.S. has spent $145 billion to keep the companies afloat.

Administration officials say they will outline a proposal to Congress by early next year and that intense discussions are under way on how the government should restructure its role in housing finance. The administration doesn’t appear to have coalesced around an answer, according to the officials, though top advisers have indicated they see some continuing government role.

On Friday, Rep. Barney Frank (D., Mass.) said he would begin drafting a bill in September to address the companies’ future that would split their public and private roles. “Yes, there’s room for a shareholder-owned corporation,” he said on Bloomberg Television. “To the extent that we want subsidy, I think we have to separate it out.

Full story: Fight Now Looms Over Fannie, Freddie –