A Treasury Department report on the future of U.S.-owned mortgage companies Fannie Mae and Freddie Mac will be delivered to Congress in the first half of February, rather than by the end of this month as prescribed under the Dodd-Frank regulatory overhaul law, an official said.

Washington-based Fannie Mae and Freddie Mac of McLean, Virginia, have been surviving on taxpayer aid since they were taken over by the federal government in 2008 amid mounting losses linked to subprime mortgages. They have drawn more than $150 billion in taxpayer funds to remain solvent.

Under Dodd-Frank, signed by President Barack Obama in July, the administration was to deliver a proposal for ending the losses and restructuring the nation’s mortgage finance system before the end of January.

Treasury Secretary Timothy F. Geithner instead will deliver the report in mid-February so the timing won’t interfere with the president’s State of the Union speech tomorrow and Obama’s budget proposal the week of Feb. 13, according to an administration official who spoke on condition of anonymity because the timing hasn’t been made public.

Representative Randy Neugebauer, a Texas Republican who leads the investigative panel of the House Financial Services Committee, said he is “disappointed” in the administration’s delay.

“It’s of great concern,” he told reporters. “What is going on over there?”

Legal Fees

Neugebauer, who is investigating the two government- sponsored entities, or GSES, said he has learned that they have spent more than $160 million in legal fees to defend former executives facing civil lawsuits accusing them of fraud.

“The taxpayers now own Freddie and Fannie,” Neugebauer said. “Accordingly, I intend to open up the operations of the GSEs so the taxpayer is fully aware how they run their operations from their accounting practices to their ‘proprietary’ pricing models and general business functions.”

Neugebauer made his comments today to a conference sponsored by the University of Maryland.

Some Republicans have said they want to eliminate Fannie Mae and Freddie Mac and leave mortgage finance to the private sector. Neugebauer said policy makers must minimize taxpayer losses, “enact incremental reforms” to slowly bring private capital into the system, and improve loan quality.

“It may require maintaining and then phasing out government guarantees over a 10- to 15-year period, but eventually the market will be able to transition to a truly market-based system,” he said.

The Wall Street Journal previously reported the delay in the administration’s housing report.