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Kai Ryssdal: As long as we're talking about bailouts, I'm obliged to mention Fannie Mae and Freddie Mac here. Fannie announced a quarterly loss of $13 billion this morning and then promptly announced it needs another $8.5 billion from the Treasury Department to keep on going. The federal bailout of Fannie and its cousin in government receivership, Freddie Mac, is now $145 billion. The Senate is supposed to start debating the financial reform bill once again tomorrow. It's a bill that doesn't include an overhaul for either of the government-owned mortgage companies.
From Washington, Marketplace's Nancy Marshall Genzer reports.
Nancy Marshall Genzer: The Obama administration says it has to prop up Fannie and Freddie because they're propping up the housing market. They package mortgages into bonds, and guarantee them. The government backed almost 97 percent of the home loans made in the first quarter of this year.
Susan Wachter teaches real estate and finance at the University of Pennsylvania's Wharton School.
SUSAN WACHTER: The support by the federal government of Fannie and Freddie is the girding of the housing finance system, which is absolutely critical to the continued recovery of the overall economy.
Fannie and Freddie's guarantee helps keep mortgage interest rates low. Wachter says the housing market is too fragile now to even think about reforming Fannie and Freddie. A group of Republican senators disagrees. They've introduced an amendment to the financial overhaul. It would force the government to give up control of Fannie and Freddie within two years.
Guy Cecala publishes "Inside Mortgage Finance." He says it's good to start talking about Fannie and Freddie. But hard deadlines won't work.
GUY CECALA: There's nothing we're going to build in there that's going to start on September 1st, July 1, or whatever else. We're basically laying the groundwork for where we want to be in several years.
But Boston University finance professor Mark Williams says the time for reform is now, while the consequences of the financial meltdown are still fresh in our minds. And he wants Congress to keep Fannie and Freddie away from the types of risky investments that caused the financial crisis.
MARK WILLIAMS: That's saying, hey, we had a fire. It was caused in part by these two entities so they can't play with matches. Those matches would be put up on the shelf. So that's all preventive things I think would be very effective, but yet it's not in the Senate bill itself.
The Obama administration says it will come up with a game plan for Fannie and Freddie next year.
In Washington, I'm Nancy Marshall Genzer for Marketplace.