Fannie-Freddie Overhaul Is 'Very Important' Goal, Mnuchin Says
skibrian
Treasury Secretary Steven Mnuchin said overhauling the mortgage-finance system is “very important” to President Donald Trump’s administration and that officials are working with congressional leaders and other regulators to figure out what to do with mortgage-finance giants Fannie Mae and Freddie Mac.
“We are committed to working with the House and the Senate on having a reform package that makes sure that we promote necessary liquidity in the housing markets,” Mnuchin said Friday during a briefing with reporters at the White House. The overhaul is not a focus in the first half of this year, he said.
The two companies, which have been under U.S. control since 2008, are the backbone of the American mortgage market. They buy loans from lenders, wrap them into securities and provide guarantees to investors in case of default. The government seized them during the financial crisis, eventually injecting them with about $187.5 billion in bailout money. The companies have since returned to profitability and paid the government more in dividends than they got in taxpayer aid.
Mnuchin has said more than once that a housing-finance overhaul is a Trump administration priority, but much more time has been put into other big-ticket items, including regulatory relief and tax reform. In the meantime, some lawmakers have begun to hold staff briefings and meet with authors of various housing-finance plans in the expectation of a renewed legislative push later this year.
Previous legislative efforts have been difficult, in part because any changes could have large ramifications on mortgage rates and home ownership, and in part because there’s no immediate catalyst to make lawmakers focus on the issue.
Some advocates of preserving Fannie and Freddie, including investors in their private common and preferred shares, have urged the Trump administration and the Federal Housing Finance Agency to bypass Congress in favor of administrative actions that could release the companies from government control. FHFA, which oversees the two companies, has been involved in the discussions at Treasury, Mnuchin said.
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skibrian
neo
Achilles
joseph s
Europegoodold
keyow...@gmail.com
But if congress pushes for a big reserve level, the excercise is moot because no one will enter market. And, if they accept a low reserve to bring in competition, that's good for sharehders of gses, too (whoever they end up being). Low reserve=more profit per share.
As a preferred holder, I like my odds right here.
joseph s
Halo Hat
The White House
Office of the Press Secretary
“For Immediate Release April 21, 2017
Press Briefing by Secretary of Treasury Steve Mnuchin on Financial Services Executive Order and Memoranda”
“Q - Mr. Secretary, in Congress it seems like in the Senate they want to do GSE reform before Dodd-Frank reform. Is that order you would support? And what do you think is the biggest holdup to getting a GSE deal?
SECRETARY MNUCHIN: Okay, well, I’m not going to comment on the Senate’s priority. I defer to them on that. But I will say, and I’ve said this from the time period in the campaign and from the minute I was nominated for this position, that housing reform is very important to this administration; that this is not something we’re focused on in terms of legislation in the first half of this year, but again, we’ve been having significant discussions at Treasury with the FHFA, with congressional leadership on this. And we are committed to working with the House and the Senate on having a reform package that makes sure that we promote necessary liquidity in the housing markets.
These are very important to the economy and we want to make sure in no way do we not have that, but also making sure that we don’t put taxpayers at risk and leave these entities as they are.”
—————————————————————————————————————–
If anything is putting the taxpayers at risk it is lack of capital caused by the Net Worth Sweep. Sure hope that is what Mr. Mnuchin means. And Melvin Watt flat out said it already, among others.
Then what happens with the warrants? Govt. takes all, none, somewhere in between? I just can't see the govt. or at least this administration TAKING all 79.9% nor can I see how sweeping BILLIONS over what was forced on FnF via accounting fraud be considered as a dividend with zero "loan" repayment consideration given how all the other "bailout" recipients where treated and the profit or lack thereof the government received from those other organizations.
keyow...@gmail.com
1. We lost in the courts
2. Its revs for the govt that the courts have said it has the right to take.
3. No better cover for helping preferreds than to slam the commons.
G. Buckman
On Monday, April 24, 2017 at 4:45:18 AM UTC-4, Halo Hat wrote:
“Q - Mr. Secretary, in Congress it seems like in the Senate they want to do GSE reform before Dodd-Frank reform. Is that order you would support? And what do you think is the biggest holdup to getting a GSE deal?
SECRETARY MNUCHIN: Okay, well, I’m not going to comment on the Senate’s priority. I defer to them on that. But I will say, and I’ve said this from the time period in the campaign and from the minute I was nominated for this position, that housing reform is very important to this administration; that this is not something we’re focused on in terms of legislation in the first half of this year, but again, we’ve been having significant discussions at Treasury with the FHFA, with congressional leadership on this. And we are committed to working with the House and the Senate on having a reform package that makes sure that we promote necessary liquidity in the housing markets. These are very important to the economy and we want to make sure in no way do we not have that, but also making sure that we don’t put taxpayers at risk and leave these entities as they are.”
