The Government Accountability Office (GAO) entered into the debate over the future of Fannie Mae and Freddie Mac on Thursday, blistering some of the most widely discussed options for revamping the government-sponsored enterprises.

Though the watchdog agency did not take a formal position on what policymakers should do with the enterprises, it essentially declared two ideas unworkable — fully privatizing the GSEs or turning them into public utilities. Those options could spur inefficiencies, raise mortgage rates and take banks out of the business of offering traditional mortgages, the GAO concluded.

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