US Must Play Role In Mortage Market: FHFA Head

Law360, New York (June 1, 2009, 12:00 AM EDT) -- Government housing-insurance programs are "high-risk," but the U.S. nevertheless has a role to play in backstopping the nation's $6 trillion mortgage market, a top housing finance official told Congress on Wednesday in a hearing addressing how to fix Fannie Mae and Freddie Mac.

“It is important to get the mortgage model right," said James B. Lockhart III, director of the Federal Housing Finance Agency, which oversees the troubled lenders.

A possible fix, Lockhart said, would be to reconstitute the two home lenders as liquidity providers of...
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