Latest from TH: "VM–I have not read or heard anything that would indicate that the state and fate of Fannie and Freddie are being discussed among the senior economic policymakers in the Biden administration, but that doesn’t rule out the possibility that discussions on this issue might be taking place behind the scenes. As I’ve said often, returning the companies to their former states of shareholder-owned companies, with capital requirements that allow them to set their guaranty fees on an economic basis to the benefit of lower-income borrowers (whose share of loans guaranteed by Fannie and Freddie has plunged since the conservatorships), should be a “wheelhouse” initiative for a Democratic administration that claims to support affordable housing. And as I detailed in my current post–which was written with the administration’s senior policymakers, and those who know or might influence them, in mind (and that I know has been circulated widely)–there IS in fact “An Easy Way Out” of the Fannie and Freddie conservatorships that would be a win for all stakeholders, and for which the Biden administration could take credit.
Will they embrace that way out? I wish I knew. But “kicking the can down the road” won’t result in a better resolution than the one I’ve proposed, and it WILL result in some other administration getting the credit (and the value of Treasury’s warrants for 79.9 percent of the companies’ common stock) for whatever that resolution ultimately turns out to be.
I will continue to be on the alert for clues that suggest something might be stirring within the Biden administration’s policy circles. Absent such clues, however, I have no basis for speculating what may or may not happen with Fannie and Freddie, either before or after the election, irrespective of which way it goes."
