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Fannie, Freddie 'Black Holes' of Financial Reform: Strategist

Fannie Mae and Freddie Mac are the real 'black holes' in thefinancial regulation bill before Congress and they both need to be addressed, Robert Pozen, Chairman of MFS Investment Management, told CNBC Monday.

"They were too political volatile to handle and are not in the bill," said Pozen who is a former vice chairman of Fidelity Investments. "But we need to get to them. Fannie reported an $8 billion loss in the first quarter but the costs to them for the loans in the footnote of the report, were over $100 billion. The $8 billion may turn out to be just a drop in the bucket."

Pozen went on to say that it's difficult to deal with Fannie and Freddie because the housing market is too weak at this time. "It will probably take a year or two (for a housing recovery) before they can be dealt with," Pozen added.

Pozen also criticized a segment that is currently in the financial regulation bill that he says could have a negative effect on the markets.

"There's a sleeper in that there that's worrisome," Pozen said. "It's the Securities Exchange Commission's rule having authority over conflict of interests. What does that mean? I don't like to see them with broad authority and without any perimeters. Are the going to tell hedge fund manager what they can make? I hope not. The markets won't like that."