U.S. Treasury Secretary Timothy Geithner will present Congress with three options for reducing the government’s role in the nation’s housing finance system and minimizing the influence of mortgage companies Fannie Mae and Freddie Mac, people familiar with the plan told Bloomberg News. Geithner will release the proposal as soon as Friday, with one plan calling for the elimination of Fannie and Freddie and their government-backed guarantee of mortgages. Under the Dodd-Frank financial regulatory overhaul enacted last July, the administration was required to submit a plan for ending taxpayer support for Fannie and Freddie. [more]

Fannie Mae and Freddie Mac — the government-owned mortgage giants — may see new owners soon, according to the New York Post, if a co-op transition plan is approved at today’s housing finance summit in Washington, D.C. Under the plan, the entities would become co-ops owned by lenders Wells Fargo, Citigroup, JPMorgan Chase and Bank of America. Proponents of the plan say that it would relieve taxpayers of a $150 billion burden, which has caused pains in the post-boom era. This plan is part of a larger lending reform proposal package to be pitched today during a conference that includes Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan. [Post]

[more]

Should the federal government do away with housing finance giants Fannie Mae and Freddie Mac? As the debate rages on, CNBC talked to Treasury Secretary Timothy Geithner and Congressional Oversight Panel chair Elizabeth Warren about their views on reforming the housing finance system. Afterwards, Howard Glaser, former counselor to the Department of Housing and Urban Development secretary, and Armando Falcon, chairman and CEO of Falcon Capital Advisors, weighed in with their analyses. Falcon’s take: we do need government support in the mortgage market — right now, through Fannie and Freddie — until a new secondary market is set up in this country. However, he said, the current system is “inherently flawed… we have to come up with a new system that is either fully private or fully government or some healthy mixture.”

The Obama administration is hoping to bring an end to its $700 billion federal bailout program in the very near future, Treasury Secretary Timothy Geithner told the Senate Agriculture Committee yesterday, adding, “nothing would make me happier.” On Nov. 19, Geither had said at a hearing before the Joint Economic Committee that the Troubled Asset Relief Program had “substantial resources” left, which would go toward paying off the country’s rising debt. Yesterday’s hearing also brought a push from Geithner for proposed regulations in the derivatives market that he said would increase transparency and help to restore confidence in the financial system. Some lawmakers objected to such regulations, saying that they would significantly increase costs for companies, many of which have been lobbying heavily against them.

Representative Barney Frank wants banks to pick up the pace of loan
modifications for people in trouble on their mortgages and vowed to
revive a bill that would let bankruptcy judges reset payments if banks
don’t act faster. Treasury Secretary Timothy Geithner and more than two
dozen mortgage companies reached agreement this week to get 500,000
loans modified by November 1. The flood of delayed and delinquent
payments left many banks and loan servicers overwhelmed by paperwork
and makes the prospect of success difficult. [AP via FAR]
[more]

Representatives from mortgage servicing companies will be meeting with
senior officials from the Treasury and Housing and Urban Development
departments today to discuss the results thus far of the government’s
Home Affordable Modification Program. Treasury Secretary Timothy
Geithner and HUD Secretary Shaun Donovan told the mortgage servicers in
a letter that there have not been enough mortgage modifications
completed to date. There were 160,000 trial mortgage modifications made
by servicing companies as of mid-July, according to the Center for
American Progress, with 165,000 more outstanding offers. More than 1.5
million homes have gone into default or received foreclosure notices in
the first half of 2009. TRD 4 Comments

• Tweet