NEW YORK - September 9, 2010 - The federal government should take mortgage finance giants Fannie Mae and Freddie Mac off life support sooner rather than later, the Mortgage Bankers Association urged on Wednesday.

The bankers said Fannie Mae and Freddie Mac should move beyond the conservatorship that started two years ago and be placed into receivership.

"Fannie Mae and Freddie Mac have already moved well beyond the points where any other financial institution would have been put into receivership," MBA Chief Executive John Courson and MBA Chairman-elect Michael Berman wrote in a seven-page letter to the Federal Housing Finance Agency.

As the financial crisis unfolded in 2008, then-Treasury Secretary Henry Paulson effectively took control of the firms, although he stopped short of full nationalization by placing them in a "conservatorship" to keep them off the federal balance sheet.

The government controls 79.9% of Fannie Mae and Freddie Mac, just shy of the 80% threshold for placing them on the federal books. Conservatorship is intended for firms that could be restored to health, while receivership is the end-of-the-line liquidation phase.

"The current situation is not unlike a brain dead patient who is being kept alive indefinitely by artificial life support," Courson and Berman wrote.