Trump officials working on plan to end Fannie Mae, Freddie Mac conservatorship
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Brittany De Lea
Fox BusinessJanuary 22, 2019, 4:47 AM CST
The Trump administration is looking to end the conservatorship of government-sponsored housing authorities Fannie Mae and Freddie Mac in the near future.
The acting director of the Federal Housing Finance Agency told employees that a plan to end the conservatorship, implemented during the financial crisis, would be released in the coming weeks, according to a report from MarketWatch, which cited a person who attended the meeting.
Fannie and Freddie have been operating within the government since being bailed out for nearly $200 billion at the height of the financial crisis.
The two government-sponsored enterprises do not originate loans – instead they purchase and guarantee them on the secondary market.
Privatizing the entities has been a long-time goal of U.S. Treasury Secretary Steven Mnuchin, who told FOX Business in Nov. 2016 that the administration had to “get them out of government control.”
“It makes no sense that these are owned by the government and have been controlled by the government for as long as they have,” he said, promising at the time to execute the separation “reasonably fast.”
Taking Fannie Mae and Freddie Mac out from under government control could be a boon to shareholders – who have essentially had shares wiped out. As of 2012, profits from Fannie and Freddie have been redirected to the U.S. Treasury.
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Mnuchin has not specified how he would reform the housing agencies, though he told Bloomberg in December that he preferred to proceed with bipartisan legislative support.
Mel Watt, appointed under former President Barack Obama, left the FHFA in January. Trump has nominated Mark Calabria, chief economist for Vice President Mike Pence, to take his place.
