Trump calls freeing Fannie Mae and Freddie Mac from U.S. control a ‘pretty urgent problem’
President Trump said freeing Fannie Mae and Freddie Mac from government control is a “pretty urgent problem” that his administration plans to work with Congress to address.
Trump, speaking Friday at a conference hosted by the National Assn. of Realtors, said that the mortgage giants lack competition, that taxpayers remain on the hook for any losses at the companies and that they aren’t being run as well as they could be. He added that his administration is discussing ideas for fixing Fannie and Freddie with “some incredible talent from Wall Street.”
The president’s remarks reflect the White House’s determination to release the companies from conservatorship, something lawmakers and policymakers have failed at for years. In March, the Trump administration released an outline for overhauling the housing finance system that directed the Treasury Department and the Department of Housing and Urban Development to write plans for reform. The reports are expected to be completed within the coming months.
“It’s really a problem that other than government should be doing,” Trump said Friday. “So we’re looking at different alternatives. We have many geniuses looking at it and we’ll figure something out.”
What to do with Fannie and Freddie, which backstop about $5 trillion of mortgage securities, is the main unresolved issue from the financial crisis more than a decade ago. The companies were taken over in 2008 as the housing market cratered and were sustained by a taxpayer bailout. They have since returned to profitability and paid dividends to the Treasury totaling $105 billion more than they received.
“The taxpayer’s actually been — in some ways, in many ways — repaid from the bailout of Fannie and Freddie,” Craig Phillips, the departing Treasury official who has led the department’s housing finance reform efforts, said Thursday at an event in Virginia. “We’ve got to turn the page and fix it to move on.”
While there are many aspects of housing reform that require legislation, administration officials and regulators have signaled they may take action on their own if Congress doesn’t act. Mark Calabria, director of the Federal Housing Finance Agency, said last week that he’s fine with releasing the mortgage giants from government control without lawmakers’ action.
In his remarks Friday, Trump said he would work closely with Congress to pass housing legislation that “welcomes the private sector, competition, protects taxpayers and preserves homeownership for future generations.” But he said his administration would also consider taking other actions to modernize housing programs and expand affordable housing.
