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Fannie and Freddie are fighting with the Trump administration over $7.7B
FHFA owes the government more than $7B by end of year
Fannie Mae and Freddie Mac owe the White House more than $7 billion, and the two entities are fighting over how to move forward.
Officials from the Federal Housing Finance Agency say they want Fannie and Freddie to keep between $2 billion and $3 billion to protect them against losses, but in exchange for this, officials from the Trump administration want to limit their market footprint through measures like tighter limits on loan sizes that they back, according to Bloomberg.
Fannie and Freddie are scheduled to pay the U.S. Treasury $7.7 billion by the end of December, and if FHFA director Mel Watt decides to withhold some money without getting approval from the administration, it could lead to a major conflict between President Donald Trump and the independent agency.
The negotiations stem from the government’s takeover of Fannie and Freddie in 2008. The two mortgage giants got $187.5 billion to help them get through the financial crisis, while taxpayers got a new type of stock in return that paid a dividend of 10 percent. [Bloomberg] – Eddie Small