Treasury housing plan could seek to reduce role of Fannie and Freddie

New York /
Feb.February 09, 2011 12:34 PM

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. The government took control of the companies in September 2008 and has since taken more than $150 billion from the Treasury to cover losses linked to subprime mortgages.

The administration will also offer options for change without proposing legislation, but rather presenting a way to draw private funds back into the housing finance market and reduce the government’s role in insuring mortgage-backed bonds. Ideas for gaining private capital may include increasing the insurance premiums charged by Fannie and Freddie and forcing them to shed loans in their nearly $1.5 trillion portfolios, sources told Bloomberg. The administration also may suggest reducing the size of loans that the government-sponsored enterprises can insure. President Barack Obama met with Geithner and other top aides at the White House yesterday to put final touches on the proposal. [Bloomberg]


Related Articles

arrow_forward_ios
Treasury Secretary Steven Mnuchin with Donald Trump. (Getty)

Treasury quits bid to privatize Fannie Mae, Freddie Mac

Treasury quits bid to privatize Fannie Mae, Freddie Mac
FHFA director Mark Calabria (Getty; iStock)

Federal housing agency extends forbearance options for multifamily landlords

Federal housing agency extends forbearance options for multifamily landlords
Future of Fannie, Freddie privatization is uncertain

Future of Fannie, Freddie privatization is uncertain

Future of Fannie, Freddie privatization is uncertain
(iStock)

Foreclosure filings are way down. There’s a reason

Foreclosure filings are way down. There’s a reason
How tough is Freddie when it comes to protecting landlords and tenants?

How tough is Freddie when it comes to protecting landlords and tenants?

How tough is Freddie when it comes to protecting landlords and tenants?
The rates for a 30-year fixed-rate mortgage dropped 7 percentage points for the week ending September 10, reaching 2.86 percent. (iStock)

Mortgage rates notch new low

Mortgage rates notch new low
FHFA Director Mark Calabria and PIMCO CEO Emmanuel Roman (Getty, iStock)

PIMCO warns of danger in Fannie, Freddie privatization

PIMCO warns of danger in Fannie, Freddie privatization
Wells Fargo CEO Charles Scharf (Scharf by Win McNamee/Getty Images; Unsplash)

Borrowers sue Wells Fargo over forbearance policy

Borrowers sue Wells Fargo over forbearance policy
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...