Treasury Secretary Paulson Pleased Housing Bill Passed House Quickly

After the U.S. House of Representatives passed a housing bill including provisions for the creation of a new GSE regulator and a liquidity backstop to help the beleaguered Fannie Mae and Freddie Mac, U.S. Treasury Secretary Paulson expressed his gratitude for the bill having passed quickly.

"As I have said before, the GSE portions of this bill are orders of magnitude more important to turning the corner on the housing correction and supporting our markets and our economy," Paulson said.

However, he also said he was not completely satisfied with some parts of the bill which include "extraneous provisions that we have opposed as detrimental to our efforts to get through the housing correction quickly."

On Wednesday, the U.S. House of Representatives passed the controversial housing bill to rescue Fannie Mae and Freddie Mac from possible insolvency. The bill passed by a vote of 272-152.

It will now move on to the Democrat-controlled U.S. Senate, where it is expected to pass.

The bill effectively sets a new regulator for the two mortgage giants. It is geared towards alleviating some of the pressures in the U.S. housing market, a problem which several experts have said must be resolved before the U.S. economy can recover.

A key part of the bill includes a reform plan for government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, which came under pressure as default rates in the United States soared.

Paulson added that he looks forward to working with the Senate to send the bill to President George W. Bush as quickly as possible, who agreed not to veto the bill despite having some reservations over specific aspects of the legislation.

By Erik Kevin Franco with contributions from Steve Stecyk and edited by Nancy Girgis