Trump likely to take lead on Fannie/Freddie reform now that Dems control the House

White House expected to nominate successor at Federal Housing Finance Agency

National /
Nov.November 12, 2018 10:44 AM

Donald Trump and Mel Watt (Credit: Getty Images)

With control in Congress split following last week’s midterm elections, the Trump administration is likely to take its own steps to overhaul Fannie Mae and Freddie Mac.

The White House is expected to consider steps to reduce the government’s role in backstopping the mortgage industry as Trump nominates a successor in the coming weeks to the head of the Federal Housing Finance Agency, the Wall Street Journal reported.

The administration is limited as to what it can do with Fannie Mae and Freddie Mac without Congress passing legislation, but the FHFA can do things like raise fees on lenders and adjust the size of loans companies can buy, according to the Journal.

A conservative successor to current FHFA Director Mel Watt – an Obama-era appointee whose five-year term ends in January – could shrink the government’s role in housing and potentially make it more expensive for borrowers who take advantage of Fannie- or Freddie-backed loans.

Additionally, a new appointee could lower the maximum size of a loan that Fannie or Freddie could purchase, which could impact deals in pricey states including California and New York, the report said. For instance, in New York, Fannie Mae backed a whopping $2.7 billion acquisition loan that Wells Fargo provided to Blackstone Group and Ivanhoe Cambridge for the purchase of Stuyvesant Town-Peter Cooper Village in 2015.

The industry is pushing the Trump administration for a moderate FHFA director who will take modest, incremental steps to reduce Fannie and Freddie’s footsteps in the housing market.

“The question is more about pace than where we end up,” said Robert Broeksmit, chief executive of the Mortgage Bankers Association.

Both sides of the aisle in Congress have said hammering out a deal would be a priority, though it’s unlikely that lawmakers can overcome philosophical differences. [WSJ] – Rich Bockmann


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
Real estate stocks push up this week as U.S.-China trade tensions ease
Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
RSA President Joseph Strasburg (Rent Stabilization Association)
Landlords plea for water rate freeze ahead of vote
Landlords plea for water rate freeze ahead of vote
Gary LaBarbera, Sen. Salazar and Sen. Gianaris (Getty)
Real estate winners and losers of the legislative session
Real estate winners and losers of the legislative session
A campaign by the Small Property Owners of New York to raise the rent on stabilized units doesn’t have the backing to move the needle (Getty)
Small landlords’ raise-the-rent campaign lacks backing
Small landlords’ raise-the-rent campaign lacks backing
1133 Sixth Avenue, 114 West 47th Street, 537 Greenwich Street and 55 Broadway (Tdorante10/Wikimedia, Durst Organization, Easter Consolidated Google Maps)
These were the largest Manhattan real estate loans in May
These were the largest Manhattan real estate loans in May
Sen. Michael Gianaris (Getty, iStock)
Hotel, office conversion bill advances with deadline at hand
Hotel, office conversion bill advances with deadline at hand
Acting Katara CEO Andrew Humphries and 355 West 16th Street (Google Maps, AHIC)
Katara Hospitality takes over Dream Downtown’s $125M ground lease
Katara Hospitality takes over Dream Downtown’s $125M ground lease
arrow_forward_ios

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

Loading...