Report: Treasury Outsourced Foreclosure Bailout

The government's efforts to stem the foreclosure crisis may have been hampered by its reliance on Fannie Mae and Freddie Mac, according to a new report.

The two mortgage giants have "a history of profound corporate mismanagement," and were overly reliant on subcontractors, the report by the Congressional Oversight Panel said.

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Private businesses "do not take an oath of office, nor do they stand for election. They may have conflicts of interests, are not directly responsible to the public, and are not subject to the same disclosure requirements as government actors," the report said.

Still, the report noted that giving Treasury discretion in the use of private companies meant that the TARP program could be carried out quickly. The Treasury deserves credit for its efforts to improve the contracting process, the report said.