WASHINGTON (Reuters) - New York Senator Hillary Clinton said the federal government should establish a special entity that would buy mortgages from Americans and later sell them just as it did during the Great Depression.

"I think it's imperative that we start considering such an entity like this," the former Democratic presidential candidate told CNBC television.

Barney Frank, chairman of the House of Representatives Financial Services Committee and a Democrat, also supports such a plan, she said.

Clinton also said the U.S. Treasury Department should have the authority to modify home mortgages.

(Reporting by Tim Dobbyn; Writing by Susan Heavey; Editing by Brian Moss)

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