Fannie-Freddie case puts spotlight on Mnuchin’s housing finance plans

Housing groups think mortgage market overhaul isn't a high priority for the Treasury Secretary

TRD New York /
Feb.February 23, 2017 05:37 PM

Treasury Secretary Steve Mnuchin (Credit: Getty Images)

Steven Mnuchin may soon be forced to clarify his plans for housing finance reform, following this week’s Federal Appeal Court decision that investors in Fannie Mae and Freddie Mac aren’t entitled to billions in profits.

Mnuchin previously said that the $10 trillion mortgage market is a priority for the Trump administration. The decision from the Federal Appeal Court will push Mnuchin to show how soon he will make changes, Bloomberg reported. Some housing industry groups and analysts said reform won’t happen quickly, because Republican lawmakers are more interested in repealing the Affordable Care Act and overhauling the tax code.

“The court decision will force Mnuchin to show just how high a priority housing-finance reform is for the Trump administration,” Brandon Barford, a partner at Beacon Policy Advisors, a Washington-based policy research firm, and former staff member for the Senate Banking Committee, told Bloomberg. This week’s decision barred most legal claims from Fannie-Freddie investors — primarily hedge funds — who claimed the U.S. government illegally seized billions from the firms, and left shareholders little room to pursue claims for monetary damages.

In interviews with both CNBC and Fox Business Network Thursday, Mnuchin said taxes are the Treasury’s first priority. He added that he hopes to overhaul Fannie and Freddie in “this administration.”

Fannie Mae and Freddie Mac buy mortgage loans from lenders, stamp them with an implicit government guarantee, repackage them as securities and sell them off to investors. In 2015, Fannie Mae provided Blackstone Group and Ivanhoe Cambridge’s acquisition of Stuyvesant Town-Peter Cooper Village with a $2.7 billion loan originated by Wells Fargo.

The government took over Fannie and Freddie during the 2008 financial crisis, and injected $187.5 billion in bailout money. [Bloomberg]Miriam Hall


Related Articles

arrow_forward_ios
The number of closed sales fell by more than 14 percent year over year in the third quarter (Credit: iStock)

Low mortgage rates are killing Manhattan’s all-cash buyer

Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

1735 York Avenue and Bonjour Capital's Charles Dayan (Credit: Google Maps)

Dayan’s Bonjour Capital inks $115M refi for Upper East Side building

US home mortgage debt surges past pre-recession record

(Credit: iStock)

Despite housing market slowdown, mortgage lenders just had a great second quarter

The Daily Dirt: The dark cloud hanging over buyers

Trump proposal would make getting a mortgage harder for homeowners deep in debt

Everything you need to know about Realogy and Amazon’s TurnKey partnership

arrow_forward_ios