With much talk in Washington about reforming the budget and cutting costs, the Government Sponsored Entities (GSEs), Fannie Mae and Freddie Mac have been in the cross hairs of legislators on both sides of the political isle.

Capital Markets Subcommittee Chairman Rep. Scott Garrett has announced hearings will begin with the Subcommittee on Wednesday, February 9th.

The goal of the hearings, according to Rep. Garrett is to examine what Congress can do right now to protect homeowners from the cost of the bailout of the two GSEs.  "With a price tag of $150 billion and counting," Garrett said, "Congress must take immediate measures to minimize this cost and ensure taxpayers are never put in this situation again. The status quo is unacceptable, which is why we will continue to seek alternative solutions to housing finance in the United States that decrease the government’s exposure and get private capital off the sidelines.”

Opponents of the Dodd-Frank Consumer Protection Financial Act passed last year were upset that the sweeping financial legislation failed to include provisions for reforming the GSE's.  Rep. Garrett indicated that the Subcommittee can identify options on how to wind down the operations of the two GSEs.

There has been speculation of many different options for reforming the GSEs including shutting them down completely, restructuring with limited capacity and creating privatized cooperatives.

With this step, debate will begin to heat up and each action will certainly be followed with great scrutiny from the mortgage industry.