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In its February 11 Report to Congress, the Obama administration asked Congress to work with it to fashion legislation to accomplish three broad goals of housing finance market reform:

• The winding down of Fannie Mae and Freddie Mac (the GSEs);
• Returning FHA to its traditional role a targeted lender of affordable mortgages; and
• A largely privatized system of housing finance with an open question as to the level of government involvement.

These three goals provide the opportunity for a possible bi-partisan solution that could result in true reform of our housing finance market. I congratulate this subcommittee for its contributions towards achieving this consensus that the GSEs must be wound down. I will address this opportunity later on in my testimony.

Secretary Geithner in testimony before the full Financial Services Committee on March 1 asked that these three goals be accomplished sooner rather than later during this Congress. It is therefore a pleasure to testify today on the thrust of these eight proposed bills which aim to move forcefully forward on achieving this necessary and critical goal.

Edward Pinto is a resident fellow at AEI.