Clues May Emerge on Trump’s Plans for GSEs

The New York Times writes that two upcoming actions may grant some insight into the Administration's plans for Fannie Mae and Freddie Mac. The first action has to do with the quarterly net worth sweep of all the GSEs' profits into Treasury. The article notes that while those funds may be a boon to the government, President Trump and Treasury Secretary Mnuchin may want to reconsider that arrangement, as it has left the GSEs undercapitalized, in the event of future losses, and would likely require them to make a draw from Treasury.

The article continues by noting that the second action will come by April 17th, when the government is required to hand over previously withheld documents in an ongoing legal battle involving Fannie and Freddie shareholders challenging the net worth sweep. Because the resulting discovery could change the trajectory of this case and affect the future of the GSEs, how the Justice Department responds may give clues as to what the Administration has in store for the GSEs.

As policy makers and legislators chart a path for the future of the GSEs, SFIG will continue to provide market-informed feedback to policy makers to serve as the go-to source for industry knowledge and experience. SFIG will proactively develop and promote strategies to advocate for a return of private capital to the secondary mortgage market.

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