Legislators to seek new solution for Fannie, Freddie

WASHINGTON — It is the forgotten bailout: $125.9 billion spent by taxpayers so far to rescue housing giants Fannie Mae and Freddie Mac — nearly twice what's been pumped into AIG — and with no end in sight.

But in a hearing Tuesday, lawmakers will start pressing the Obama administration for an exit strategy as the government faces an unlimited federal commitment for the next three years to the housing finance agencies, which are almost single-handedly keeping the fragile real estate market afloat.

"It's clear that Fannie and Freddie, as they currently exist, should be put out of existence, which means the important question is what combination of entities public and private will replace them," said Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee.

He has called Treasury Secretary Timothy F. Geithner to testify at the hearing before his committee about how to do that.

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