Note: This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.

SPEAKERS: SHAUN DONOVAN, U.S. HOUSING SECRETARY and PETER COOK, REPORTER, BLOOMBERG NEWS 08:51

PETER COOK: I am joined by Housing Secretary, Shaun Donovan, one of the key participants in the talks today. Thank you, first of all, for the time.

SHAUN DONOVAN: Of course.

COOK: I know we are running up against the Summit taking place here. We heard earlier from Bill Gross, one of the big participants here. He can recommend to you all full nationalization of Fannie Mae and Freddie Mac, one of the more radical ideas. Is that something that you all are truly considering?

DONOVAN: Look. This is exactly why we are doing this conference. We want ideas from across the spectrum of thinking. We have got a broad range of stakeholders and I am going to say up front, nothing is off the table. We are going to through a full and open process on this. This is just the beginning of that process running through January before we make a recommendation.

COOK: But at a minimum, in your own opening comments you suggest you do want the government to have a smaller footprint in this space. Explain to me what that means.

DONOVAN: Well, look. Today, between FHA and the GSEs we are talking about more than 90 percent of all mortgages in this country. We are already taking steps to pull back from that. We have to have a vibrant private market. We need to see innovation. And so, that is the direction that we need to move.

The real question is, what is the structure? What is the best way to make sure that we continue to have access to affordable credit in this market for American families? At the same time we make sure this crisis never comes again.

COOK: There are some people out there, consumer advocates as you know, very worried that what we are creating here is a dual system, one where the wealthy in America can live in houses where they may not need a government guarantee. Everyone else potentially does right now or maybe they don't even have the option of a government guarantee.

DONOVAN: Well, what you see through FHA, part of HUD, is that we have continued to make sure that there is responsible credit available to all Americans. If you look at the way that FHA has continued to provide access to borrowers who had been shut out, African Americans, Latinos, others who have not necessarily been part of the market before, we have continued to see broad access as a key asset that we provide. And it is one of the principles that we have laid out in our principles for mortgage finance reform. There has to be broad access.

COOK: What is at stake here, the Treasury Secretary is going to touch on it himself, you guys don't have a plan due until January. This is going to take months and at the end of the day, can there be a bipartisan compromise, as the Secretary will call for today?

DONOVAN: Well, look, what we are focused on is set aside politics. Let's get the best ideas, the brightest minds from around the country. Let's look at all the options and arrive thoughtfully at the best possible solution.

This is not about politics. This is about a market that is absolutely central to the world economy, about housing, which is the most important purchase any American family is ever going to make. We have to get this right, and that means setting aside politics, focusing on the realities and the facts and the best ideas we can find.

COOK: You know there are other advocates, just as Bill Gross was talking nationalization, others who say, listen, turn this over to a private market. Nobody provides the kind of support the Federal Government does in the United States when you look at other countries around the world.

What about that, a fully private market? Is that even a possibility given the support the government is providing right now?

DONOVAN: Well, look, Peter, we have seen that when you go through a crisis like this you need to be able to have tools available that ensure that housing finance continues to be available. And what we see the GSEs, FHA doing right now is providing that kind of support. The real question is what is the right way to do that? Is it something -- what is the right size of the footprint, all of the details?

This is not a debate that, as you know, that lends itself to simple privatization versus nationalization kinds of debates. We can't -- it can't be about slogans. This is going to be about real, thoughtful, detailed proposals that get at all the difficult and complicated issues that surround this.

When you hear folks be honest about this they say, look, this is not an easy problem. It is not something we are going to solve overnight. We have to be thoughtful about it.

And, let's be clear as well. The GSEs today are making safe loans. With them in conservatorship we have made sure that the new loans they are making protect the American taxpayer. And that is key to allow us the space to have a full and open dialogue about this and get to the right decisions.

COOK: Has that pendulum swung too far the other way? Are Americans who are deserving of getting into their first home perhaps not getting that opportunity right now?

DONOVAN: Look, we continue to see through the GSEs, but particularly through FHA access for first time homebuyers. We think we have struck the right balance between access and responsible, safe lending.

COOK: Let me ask you one final question.

DONOVAN: Yes.

COOK: I know you have got to get inside. There are some who will suggest that the Administration comes into this with a premise that getting Americans into homes is still the best idea possible when renting remains an option. One of our problems in the crisis originally was that too many people were being pushed into homes they couldn't afford. Why isn't more rental an option?

DONOVAN: Well, Peter, I don't want to scoop myself in my opening remarks, but one of the things you will hear me talk about is having a more balanced housing policy. It is clear that for too long our national housing policy has been about ownership to the exclusion of rental. Ownership will continue to be incredibly important to American families, but we have to make sure that we have a balance national housing policy, and that includes rental housing.

COOK: Mr. Secretary, enjoy yourself in that Summit. Thank you for the time.

DONOVAN: It's great to see you.

COOK: We appreciate you joining us.

DONOVAN: Of course.