Paulson: Government is too deep in housing

CHICAGO, Feb. 24 (UPI) -- Former U.S. Treasury Secretary Henry Paulson Jr. said with the financial crisis abating, the government was too deeply invested in the housing market.

At the University of Chicago Tuesday, Paulson said it was "highly likely" that the Federal Home Loan Mortgage Corp. and the Federal National Mortgage Association would be restructured, as the government retreats from its position in the market.

"We very much need Fannie (Mae) and Freddie (Mac) to get us through this crisis," he said.

Paulson said, "the major decisions we (the George W. Bush administration) made were the right ones."

But he also said, "I don't think anybody believes that the government essentially guaranteeing all our mortgages is right or sustainable."

"They should at a minimum be scaled way back," he said.