The Treasury's point man on GSE reform said Wednesday that the Obama White House will not propose any changes to government guarantees backing Fannie Mae and Freddie Mac MBS for fear of hurting the liquidity and functionality of the U.S. mortgage market.

In prepared testimony on Capitol Hill, Michael Barr, assistant secretary for financial institutions, said the administration is "committed to ensuring that the GSEs have sufficient capital to perform under any guarantees issued now or in the future and the ability to meet any debt obligations." Barr noted that Fannie, Freddie, and Ginnie Mae today play an "outsized role" in housing finance, but said, "This situation is neither sustainable or desirable."

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