(Washington, D.C.) – Citizens Against Government Waste (CAGW) today applauded former U.S. Representative J.C. Watts for his comments about Fannie Mae and Freddie Mac, the government-created mortgage companies, in an appearance on Fox News channel.

In a segment of Your World with Neil Cavuto that discussed the proper roles of the two government-sponsored enterprises (GSEs), Watts said both organizations had exceeded the limits of their charters, and moved from the secondary lending market into primary lending.  Watts, who until 2002 was the Chairman of the House Republican Conference, was recently tapped to be the Chairman of FM Policy Focus, a nonprofit watchdog organization that monitors the activities of Fannie Mae and Freddie Mac. 

“J.C. Watts is correct to point out that these GSE’s have strayed out of the secondary market and away from their mission,” CAGW Vice President Leslie Paige said.  “Focusing on first-time homebuyers and low-income homebuyers are where their energies should lie – not in chasing above-market profits.  Watts will be a valuable ally in the fight to enact reforms that will promote greater competition in lending markets.  We welcome his help in putting this very important consumer issue out in front of the public where it needs to be.”

Fannie Mae and Freddie Mac benefit from federal subsidies amounting to $10.6 billion annually, and either own or guarantee more than 40 percent of the U.S. mortgage market.   Both institutions are exempt from the taxes and regulations that hamper most private corporations, giving the GSEs an undue advantage in the marketplace.

As a result, the Council for Citizens Against Government Waste has come out in favor of the “Leave No Securities Behind Act” recently introduced by Rep. Chris Shays (R-Conn.) and Rep. Ed Markey (D-Mass.).  The bill would require Fannie Mae and Freddie Mac to disclose information to the Securities and Exchange Commission (SEC), which is required of all private companies.

“The ‘Leave No Securities Behind Act’ is an excellent step toward making Fannie Mae and Freddie Mac more transparent organizations,” said Paige.  “Now is a time when the adequacy of corporate governance and the importance of full disclosure are high on the public’s agenda.  Congress should pass this measure, and pursue more reforms to open up the mortgage-lending market.  Perhaps in the not-to-distant future, both GSEs will be fully privatized, benefiting would-be homeowners across America.”

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.