Fannie Mae-No Politics (FNMA)

[jarenawer]

?

I would guess it would be one of two things: either a decision in the appeal of Judge Lamberth’s ruling in the Perry Capital case, or some public action or statement that gives observers a clue as to what is going on behind the scenes in Mnuchin’s efforts to “get [Fannie and Freddie] out of the government… reasonably fast.”

I don’t see anything to be gained by Treasury’s staying the lawsuits, and do not expect that to occur. I do believe, however, that there is some chance Mnuchin will authorize FHFA to withhold the net worth sweep payments to Treasury related to the companies’ fourth quarter 2016 net income (to be released in the next few days), which otherwise would be paid in March. We’ll have to wait to see on that.

If Mnuchin does initiate talks with plaintiffs–as I strongly suspect he will–I doubt that either side will say anything about them while they are going on. But that’s not to say we won’t hear speculation about them (including “fake facts” alleged to be true). And I also expect to see advocates for one particular course of reform for Fannie and Freddie or another make frequent and high-profile arguments for their point of view, in the hopes of building pressure on Mnuchin to see things their way. Such efforts are likely to be a waste of time–Mnuchin’s knowledge of the issues he’s dealing with makes him much less vulnerable to political arguments than a typical administration appointee–but that won’t stop people from trying.

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