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 LOS ANGELES /
Feb.February 23, 2017 03:30 PM
Treasury Secretary Steve Mnuchin (Credit: Getty Images)

From the New York website: Steven Mnuchin’s 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 Mack 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
From left: Jose Huizar, Huang Wei, Mohamed Hadid, Robert Herscu, Raymond Chan, and Arman Gabay, with Los Angeles City Hall (Credit: iStock and Getty Images)

Real estate’s role in LA corruption scandals

From left: Governor Gavin Newsom, Assemblymember David Chiu, Senator Holly Mitchell, and Senator Nancy Skinner (Credit: Getty Images)

Here are the key housing and rent control bills state lawmakers are debating

Assemblymember Phil Ting

Statewide pot shop bill gets smoked

Assemblymember David Chui

Opponents of statewide bill to cap rent increases call it “disincentive” to build

Councilmen Blumenfield and Cedillo with City Hall

City Council’s plan to restrict developer donations faces Council pushback

Inglewood Mayor James T. Butts

Inglewood spent millions soundproofing wealthier homes from LAX noise

State Senator Anthony Portantino and Glendale

Strength in the suburbs: Homeowners played central role in opposing housing bill

LAplus' Mark Vallianatos

Housing construction in LA is down, and developers blame Measure JJJ

arrow_forward_ios