WASHINGTON — Treasury Secretary Timothy F. Geithner, kicking off a half-day conference on housing finance, said Tuesday that it was important for the federal government to continue guaranteeing mortgage loans.
He said continued government support was important “to make sure that Americans can borrow at reasonable interest rates to buy a house even in a downturn.” The absence of such support, Mr. Geithner said, would make future recessions more severe because private lenders would not provide enough money for loans.
His opening remarks underscored the limits on the possibilities that the Obama administration is pondering as it opens a public conversation on reworking the government’s role in housing finance — including the future of the housing finance companies Fannie Mae and Freddie Mac, now wards of the state.
Mr. Geithner and other senior officials have said repeatedly that they do not want to revive the system that produced the housing bubble. But the administration also has shown little interest in proposals for the government to sharply curtail its support for home ownership, for example, by eliminating a range of subsidies for mortgage loans to middle-class families.
The administration convened many of the nation’s leading experts on housing finance Tuesday at the Treasury Department. The conference is intended to demonstrate the administration’s engagement with the issue. Republicans continue to criticize the decision by Democratic leaders largely to exclude housing finance from the legislation passed into law earlier this summer broadly reworking financial regulation.
The Treasury secretary struck back Tuesday at critics who asserted that the administration had done nothing to address the housing finance problem since Fannie Mae and Freddie Mac were seized in 2008. He argued that the government had already started to take the old system apart when it took control of the two institutions and that it remained important to take the necessary time “to get reform right.”
“We must take this opportunity to build a more stable housing finance system that better protects American taxpayers,” Mr. Geithner said.
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