Republicans wary of privatizing Fannie Mae and Freddie Mac

Though House Republicans proposed earlier this year to privatize mortgage giants Fannie Mae and Freddie Mac or place them in receivership starting in two years, they have now changed their stance. As the party prepares to assume control of the House next week, Republicans are cautioning that a withdrawal of government support in the housing market should be gradual. “We recognize that some things can be done overnight and other things can’t be,” Rep. Scott Garrett, incoming chairman of the House Financial Services subcommittee, which oversees Fannie and Freddie, told the Wall Street Journal. “You have to recognize what the impact would be on the fragile housing market as it stands right now.” Fannie and Freddie were placed under government control in September 2008 after they nearly failed as losses from the housing crash started to build up. It has cost taxpayers about $134 billion so far to keep the companies afloat, and the federal regulator estimates it could cost about $20 billion more. [WSJ]