The head of the House Financial Services Committee recommended Friday that government-backed mortgage lenders Fannie Mae and Freddie Mac be abolished and replaced.

Rep. Barney Frank (D-Mass.) said that the two entities his panel oversees, which were seized by the federal government in Sept. 2008, should be replaced with a new model for mortgage financing.  

"I believe this committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance," he said at a committee hearing. "That's the approach, rather than the piecemeal one."

Frank's words cast doubt on the future of two two mortgage giants, which have received over $110 billion in government assistance after they nearly failed during the flood of defaulted mortgages during the housing crisis.

The Massachusetts Democrat earlier this month said that Fannie and Freddie are now serving as a public policy arm of the government.

Before the Treasury Department took majority stakes in each company, they operated as hybrid public-private entities.