Home Economy Trump to Congress: Overhaul Fannie and Freddie or I Will

Trump to Congress: Overhaul Fannie and Freddie or I Will

2345

The Trump administration will pursue the reform of mortgage giants Fannie Mae and Freddie Mac, the guarantors of over half the nation’s mortgages, if Congress fails to act, officials told Congress on Tuesday.

In testimony before the U.S. Senate Banking Committee, U.S. Treasury Secretary Steven Mnuchin, Housing and Urban Development Secretary Ben Carson, and Federal Housing Finance Agency Director Mark Calabria defended a plan to release Fannie and Freddie from government control more than a decade after they were bailed out during the 2008 financial crisis.

Breaking News

Be the first to know when big news breaks


While reiterating that legislation to overhaul the entire system would be ideal, the officials insisted they would pursue reforms if Congress failed to act.

“If we do nothing, this is going to end very badly,” said Calabria, who warned Fannie and Freddie are undercapitalized and overly reliant on government backing to weather any downturn.

Mnuchin said he would like to end a 2012 policy of claiming all Fannie and Freddie profits “very quickly.” He added that beyond retaining earnings, the pair would also likely need access to third-party capital, estimating they could need to raise roughly $100 billion in reserves.

And they received support from Senate Republicans to begin acting alone, as housing lobbyists are extremely pessimistic Congress would pass housing legislation before the 2020 presidential election.

“While it’s the proper role for Congress to solve this … I encourage you to act and to help us get to that point,” said Senate Banking Chairman Mike Crapo.

Their plan, ordered by President Trump in March and published Thursday, is a first step on the long road to reforming Fannie and Freddie after a 2012 attempt by the Obama administration fell flat.

Lawmakers covered a range of legal and economic issues, including how the Treasury intends to bolster Fannie and Freddie’s capital, and how the administration planned to shrink the pair’s footprint, all while keeping mortgage costs stable.

The administration’s plan called for Congress to pass legislation to ensure the housing market is not destabilized, notably by giving an explicit government guarantee for Fannie and Freddie’s mortgage-backed securities, and setting up new charters that would allow other companies to compete.

Republicans and Democrats are already at odds over the report. Republicans praise the inclusion of several recommendations outlined in a draft bill unveiled by Crapo in February. Democrats say the plan will drive up housing costs for lower-income Americans.

“Rather than create a system that addresses the needs of working families, the Trump Administration has put out half-baked proposals that will make mortgages more expensive and harder to get,” said Senator Sherrod Brown, the top Democrat on the committee.

Fannie and Freddie securities have traded in a tight range since the committee meeting began. Fannie preferred shares were last up 0.6% on the day while Freddie preferred shares were up 1.6%. Fannie Mae common shares (FNMA) were last down 4% while Freddie Mac common shares (FMCC) were down 4.6%.

via newsmax

8 COMMENTS

  1. O am now a senior. I can not keep up a home on 1 acre of land due to a life changing accident.
    I have to sell my home and find it taxing to find a smaller place l can afford. I don’t need assisted living. I just need something l can afford.
    I am sure many seniors are finding themselves in the same boat. We want to live as independent as possible for as long as possible. Many have to end up living with their children.
    There needs to a way seniors can live on their own and afford it. I do not want to live with my daughter. She has her life and l would feel uncomfortable. Don’t know the answer.

  2. This is an effort to give banks more leverage over the public. Privatizing Fannie Mae and Freddie Mac which the federal government controls shouldn’t happen and should be left alone, previous president’s have avoided doing this. Now here comes this illegitimate president who himself and his family will probably benefit from doing this . (Opportunity Zones). All the protections that were implemented after the housing meltdown which taxpayers payed a total of $187 billion to bail out the banks will go away and the consumer will be left naked. Keep an eye on devious Mnuchin.

    that taxpayers bailed out with go away and that will be bad for consumers. Keep an eye on devious

  3. There will come much more mention, by the President, regarding absolute inactivity of the Democrat House of Representatives majority. They have done nothing but sit on their hands, apart from the few meetings the Dems have held, for their Judicial Committee Representatives, which centered on their constant discussions regarding how they will go about launching an Impeachment Proceeding, as if the process needs to be rediscovered. It has been “on the books” forever, but obviously the Dems haven’t taken adequate time to read that book.
    It’s like a bad joke, these officials are supposedly members of the U.S. Congress!

  4. The clinton admin. cronies who caused all the problems at fannie mae and freddie mac should be in prison! THEY STOLE MILLIONS IN PHONY BONUSES FOR TAKING IN HIGH RISK LOANS THAT FAILED BIG TIME!

  5. I Strongly Believe President TRUMP WOULD find a Fay to keep Housing Prices Affordable. First, he has to find a way for those TWO HOUSING INSTITUTIONS t stand on their own. SEPERATE FROM GOVERNMENT BACKING. #2.) THEN, He can go after lower housing costs for Seniors along with the Veteran’s. MAYBE, Wrap The Senior’s Into The Same Package and Privileges Right Along with The Veteran’s! ……I KNOW THE GOVERNMENT METROPOLITIAN HOUSING/SECTION 8 HOUSING CAN BE RE-VAMPED! …. MR. BEN CARSON … Can find a way for FOLKS TO BUY HOMES WITH THAT ASSISTANCE??? …. INSTEAD, OF JUST HELPING WITH THE RENT??? … Why Not? … BECAUSE, People Show Much More PRIDE In A Property They OWN. …..2020 Vote Trump In…Let Him Try It. Trump is doing a real good job. We are all working. THUMBS UP

LEAVE A REPLY

Please enter your comment!
Please enter your name here

*