Fannie Mae (FNMA)

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Treasury Secretary Mnuchin: 2018 is the year for Fannie and Freddie reform. “We need to fix Fannie and Freddie,”



Bruce Berkowitz Comments on Fannie Mae and Freddie Mac
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February 05, 2018 | About: FNMA +0%

Fannie (FNMA) and Freddie have helped tens of millions of Americans secure affordable, predictable mortgages to help achieve the dream of financial independence while operating under the conservatorship of the Federal Housing Finance Agency (“FHFA”). Since 2012, Fannie and Freddie have shipped the entirety of their profits—$275 billion and counting—to the U.S. Treasury. You’ve heard this all before. The point is, with hundreds of billions in profits flowing to the federal government, there is no doubt about Fannie and Freddie’s earnings power or their ability to serve the public and survive. That is why reform is coming. In a letter to the Senate this month, FHFA Director Mel Watt re-emphasized that “ongoing conservatorship is not sustainable and needs to end.” He believes Fannie and Freddie should be public utilities with regulated rates of return. We agree. Treasury Secretary Steve Mnuchin tells us 2018 is the year for Fannie and Freddie reform. “We need to fix Fannie and Freddie,” Mnuchin said in September. “[…] we’re going to fix [them] and when we fix [them] we want to make sure we never put the taxpayers at risk.” We also agree Fannie and Freddie must be returned to their private owners. So far, the Funds have realized $140 million of gains from Fannie and Freddie investments over the past four years. I would expect further gains from any Trump Administration-led initiative.

https://www.gurufocus.com/news/635531/bruce-berkowitz-comments-on-fannie-mae-and-freddie-mac