Time To Kill Off Freddie Mac, Fannie Mae, Says Barney Frank

Rep. Barney Frank wants to kill off Fannie Mae (FNM) and Freddie Mac (FRE) for good.

At a hearing in Washington today, Bloomberg reports, the Massachusetts Democrat and chairman of the House Financial Services Committee said “the committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance. That’s the approach, rather than a piecemeal one.”

Fannie and Freddie, the largest U.S. mortgage finance companies, have received $110.6 billion in taxpaper aid since regulators took control of them in September 2008.

So, what would happen to the public holders of FNM and FRE? Nothing good, in the market’s view.

• Freddie Mac shares are down 10 cents, or 7.6%, to $1.21.
• Fannie Mae shares are down 6 cents, or 5.6%, to $1.01