Key House Republican plans Fannie, Freddie wind-down

WASHINGTON Thu Jan 20, 2011 12:42pm EST

WASHINGTON Jan 20 (Reuters) - A key Republican in the U.S. House of Representatives plans to reintroduce legislation soon that would wind down mortgage finance giants Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) within five years.

Representative Jeb Hensarling told reporters "five years is the right time" to wind down the government guarantee of the two firms, which are now controlled by the U.S. government.

The fourth-highest ranking House Republican and a vocal critic of both Fannie Mae and Freddie Mac said he is open to arguments for changing the timetable, though he has not heard anything yet that would cause him to take a slower approach.

"What is absolutely nonnegotiable is getting the taxpayer off the dime and ensuring that these are no longer government sponsored enterprises, implicitly or explicitly, or in any single way," Hensarling told reporters on Capitol Hill.

The two firms have taken more than $150 billion in direct taxpayer aid since then-Treasury Secretary Henry Paulson seized them in September 2008 as loan losses mounted. (Reporting by Corbett B. Daly; Editing by Kenneth Barry)

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