Edward J. DeMarco, the acting regulator of Fannie Mae and Freddie Mac, will meet with the House Financial Services Committee Tuesday to urge lawmakers to reduce or eliminate the mortgage market's reliance on taxpayers.
Both Fannie Mae and Freddie Mac are likely to pour billions of dollars into the Treasury, causing a high dispute of what should replace them, a Bloomberg article reported.
The two companies have been under conservatorship since 2008 and have brought in almost $190 billion in taxpayer aid to stay afloat during that time, Bloomberg reported.
However, now Fannie Mae could soon be required to send as much as $62 billion to the U.S. Treasury because, once it is profitable, it may have to start counting potential tax credits as part of its net worth.
"I have been observing a developing ‘consensus’ among private-market participants that the conforming conventional mortgage market cannot operate without the American taxpayer providing the ultimate credit guarantee for most of the market," said DeMarco. "That clearly is one outcome, but I do not believe it is the only outcome that can give our country a strong housing finance system. I believe that our country, and its financial system, are stronger than that."