With the recent news of the Fannie and Freddie takeover, it is vital that we take steps to ensure that taxpayers are protected as Treasury Secretary Henry Paulson and Director of the new Federal Housing Finance Agency (FHFA), Jim Lockhart, launch their four part plan to stabilize the two mortgage giants.

On one hand, I’m satisfied that the FHFA is acting swiftly to secure the GSE’s, and is incrementally doing so to maximize American taxpayer protection. However, we must all be concerned and keep a watchful eye on the plan as it moves forward to ensure that already struggling taxpayers are not left footing the bill for this multi-billion-dollar bail-out program.

While monitoring the plans progress, it is vital that we reform the institutions so that the same thing doesn’t happen again in the future. I believe that once Fannie and Freddie are ready to be released from government control, they should be privatized. Similar to Ma Bell, we should break up the GSE’s and have smaller, privatized mortgage companies. By doing that, we will ensure that we do not go through this exercise in the years ahead. The bottom line is that the taxpayer must be fully protected while we work to stabilize the market.

Cross-posted at The Hill's Congress Blog