Recapitalizing Fannie, Freddie not viable--Treasury official

WASHINGTON, June 13 Fri Jun 13, 2014 9:28am EDT

WASHINGTON, June 13 (Reuters) - A senior U.S. Treasury official on Friday rejected proposals to recapitalize Fannie Mae and Freddie Mac, saying it would take at least 20 years to make sure they were adequately funded and that in the meantime taxpayers would potentially be on the hook.

In remarks prepared for delivery to a housing conference, Treasury Under Secretary Mary Miller repeated the Obama administration's call for winding down the two government-controlled mortgage finance firms.

"Critics of reform would suggest that we can simply recapitalize the GSEs and avoid difficult decisions around creating a new system," she said. "Even if truly rehabilitating the GSEs were possible, recapitalizing them adequately would take at least 20 years." (Reporting by Timothy Ahmann; Editing by Chizu Nomiyama)