The Obama administration is organizing a conference next month to obtain proposals to repair “broken” mortgage-finance firms currently backed by the government.

The Treasury Department said that the August 17 conference will discuss possible measures to fix the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac), the two government-sponsored enterprises (GSEs) it control of in September 2008. It follows the government’s decision to seek public comment on how to mend the system in April.

The government is hoping that the conference will spark a “comprehensive housing finance reform proposal for delivery to Congress by January 2011.” Treasury Secretary Tim Geithner said that the proposal should be one that “protects taxpayers, institutes tough oversight, restores the long-term health of our housing market, and strengthens our nation’s economic recovery.”

“Now is the time to build on the foundation we laid with the historic Wall Street Reform legislation President Obama signed last week and aggressively move forward to improve our nation’s housing finance system,” said.

Fannie Mae and Freddie Mac played crucial roles in the 2008 mortgage crisis, which led to a deep economic recession. They account for almost three-fourths of the mortgage market and invested $5.9 trillion into the sector. So far, the government has spent $84 billion dollars on Fannie Mae and $61 billion on Freddie Mac after the crisis to save them from insolvency.

Meanwhile, Jeffrey Goldstein, the department’s undersecretary for domestic finance, said that apart from Fannie Mae and Freddie Mac, the reform will also cover Ginnie Mae (Government National Mortgage Association), the Federal Housing Administration, the Federal Home Loan Banks, and a “significant private sector role” in originating, funding, and servicing mortgages.

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