Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

U.S. Treasury suspends changes to Fannie Mae, Freddie Mac share agreements

Stock MarketsSep 14, 2021 05:11PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The United States Department of the Treasury is seen in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kelly/File Photo

By Pete Schroeder

WASHINGTON (Reuters) -The U.S. Treasury Department said on Tuesday it had suspended changes to the government's stake in housing giants Fannie Mae and Freddie Mac (OTC:FMCC) imposed in the final days of the Trump administration.

Those changes are aimed at lifting curbs on the agencies' ability to back certain types of mortgages, including on second homes, multifamily homes and homes bought with higher risk loans, after the Trump administration directed the pair to shrink their footprint in the housing market.

The Federal Housing Finance Agency, which regulates the pair, is reviewing those changes and consulting with Treasury on other possible changes.

The suspension effectively freezes changes put in place in the final days of the Trump administration. Then-Treasury Secretary Steven Mnuchin had attempted to draw up a blueprint for the exit of Fannie and Freddie from government control.

In January 2020, the Treasury Department announced it had altered its stake in the pair, including allowing them to retain profits in exchange for a larger government stake in the enterprises.

However, housing advocates worried it could undermine the enterprises' core mission of making housing more affordable.

The pair, which guarantee over half of all U.S. mortgages, have been under government control since a 2008 bailout. Under the rescue agreement, the government swept up the quarterly profits of the enterprises.

FHFA said Tuesday the enterprises will still be allowed to build capital while the suspended policies are under review.

The move was met with quick praise from Democrats. Senate Banking Chairman Sherrod Brown said the previous changes were "haphazard" and welcomed the suspension to ensure "we do not unintentionally restrict access to safe, affordable housing for homeowners and renters."

However, Senator Pat Toomey, the senior Republican on the banking panel, warned the changes could risk "overheating an already-hot market."

Under the Trump administration's plan, Fannie and Freddie would have been able to retain their profits and streamline their business in a bid to slowly rebuild their capital cushions, which could eventually lead to an exit from government control. However, even that plan envisioned it would take years, and still left many legal and policy matters unresolved.

U.S. Treasury suspends changes to Fannie Mae, Freddie Mac share agreements
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email