Fannie Mae and Freddie Mac- no more?

For the past year, rumors have been swirling over the fate of Fannie and Freddie, especially with the talk that China may sell off their percentage of the Fannie and Freddie stocks and the recent announcement that Fannie and Freddie were "delisting" from the New York Stock Exchange. A decision by the Treasury was to be released on the future of the mortgage firms at the end of January, but has since been pushed back to mid-February. Reports are saying the statement could be released as soon as the 11th.

The talk seems to come down to the overall shut down, combination, or sale of the firms by the end of 2012. The reason for the drastic decision is that confidence is at an all time low and keeping them around would cost the US taxpayer another $73 billion, bringing the total bailout funding to $215 billion, a position that cannot be sustained in the long run.

Republican Scott Garett accuses the two mortgage companies of being the major cause of the financial crisis. He proposes that the two companies be overhauled, but did not say outright that the companies should cease to exist, privatize, or reduce in size.

The Obama Administrations has proposed the creation of a new federal subsidy, but Republicans don't feel that's the best solution. Since the elections, Republicans, in the House and Senate have been writing bills and amendments asking for the end of the bailouts or for an overhaul of Freddie and Fannie. Currently, Rep. Jeb Hensarling, the author of the sole bill in Congress (H.R. 4889), asks that any further bailout of the two mortgage companies be halted and for both companies to close. As of this moment, the bill is stuck in the House Committee on Financial Services and any action does not appear to be expected.

Many fears surround the topic, suggesting the housing recovery remains too fragile and feeble for the government to abandon Fannie and Freddie anytime soon and that the continued bailout is our only option at this moment. Needless to say, it's obvious something has to be done.

What would you like to see happen to Fannie and Freddie?