Rep. Scott Garrett (R-NJ), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, issued the following statement today after the Securities and Exchange Commission (SEC) announced that it has charged six former top executives of Fannie Mae and Freddie Mac with securities fraud for disclosures they made about subprime loans:
"Today's announcement by the SEC proves what I have been saying all along--Fannie Mae and Freddie Mac played a leading role in the 2008 financial collapse that wreaked havoc on the U.S. economy and, in domino effect, economies across the globe. Today's news underscores how important it is that Congress work to end the ongoing taxpayer bailout of Fannie and Freddie and replace the government-backed mortgage twins with a private market solution to housing finance. I applaud the SEC for taking decisive action on this important matter."
On Wednesday, the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises approved H.R. 3644, the Private Mortgage Market Investment Act. Introduced by Garrett in October, the Private Mortgage Market Investment Act reforms the secondary mortgage market to ensure robust private investment in the U.S. mortgage market without a government guarantee.