Fannie Mae Conservatorship – Is the end in sight under the Trump Administration?

It’s no secret that US Government conservatorship of Fannie Mae and Freddie Mac is a point of contention and the Trump Administration is seeking a push toward privatization of the secondary mortgage system. The US Government bailed out Fannie and Freddie in 2008, using $187 billion of taxpayer money and privatization proponents point to the fact that the companies have paid back profits of over $240 billion, far beyond the initial capital.
Steven Mnuchin, who was tapped by the Trump Administration as Treasury Secretary, told Fox Business News this would be a “top ten” priority for the Administration. A lot of people are watching the Fannie and Freddie saga closely and there’s anticipation, especially by those in the mortgage and real estate industries, about the outcome of the conservatorship. It could have national and international impacts and could spell big money for shareholders of Fannie and Freddie who have filed multiple suits to get their share of the profits since the conservatorship. Shareholders argue that the taxpayers have been adequately reimbursed and the Treasury suddenly changed the terms of the Government Sponsored Enterprises (GSEs) special preferred stock and deemed that the Treasury would keep the entire profit each quarter rather than the initial 10% interest obligation.
While the cases still ongoing, action by the government to remove the conservatorship would give shareholders everything they’ve been fighting for, potential access to the past profits from Fannie and Freddie, as well as future profits and the end of Government Conservatorship. What remains to be seen is how quickly the Trump Administration begins the process but a Republican president and a Republican-controlled Congress lowers the usual hurdles most administrative changes face. Thus, change may come much more quickly than anyone may anticipate.

By | 2018-05-04T02:41:32+00:00 January 9th, 2017|Home mortgage loans|Comments Off on Fannie Mae Conservatorship – Is the end in sight under the Trump Administration?

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