Former Fannie Mae Chief Executive Daniel Mudd wished he said "no" to more of the things the company was asked to do, he told the Wall Street Journal in an interview.

"We were asked — or required — to expand lending, to conserve capital while providing liquidity, to meet housing goals for the underserved, to serve shareholders and homeowners alike," Mudd told the paper.

"I should have gone to the government and gotten a clear answer to the question: What do you want — more capital or more lending?" Mudd said.

He told the paper that one option for Fannie Mae and Freddie Mac would be to privatize them.

"This would mean two things: eliminating their 'government sponsorship' and the requirement that they invest only in housing, Mudd said. "Fannie and Freddie would diversify, and operate like other highly regulated financial institutions."

He suggested that the government could alternatively become the sole owner-operator by buying the outstanding stock of the companies and placing them under a full guarantee.

The U.S. government took over the two mortgage giants in September as the global financial crisis deepened and replaced their management as part of a plan to recapitalize the two firms.

A U.S. Congress committee said last week that it would examine the financial collapse and federal takeover of the companies on November 20, after the U.S. presidential and congressional elections.