Fannie, Freddie regulator looks to end govt control before Trump's exit: WSJ

FILE PHOTO: A woman toting an umbrella passes Fannie Mae headquarters in Washington February 21, 2014. Fannie Mae said on Friday it would soon send the U.S. Treasury $7.2 billion, a profit-related dividend that makes taxpayers whole for the 2008 bailout of the mortgage-finance giant and its sibling company Freddie Mac. u000d u000dREUTERS/Kevin Lamarque

(Reuters) – Fannie Mae and Freddie Mac’s regulator is trying to expedite the housing finance giants’ exit from government control, but is yet to reach an agreement with U.S. Treasury Secretary Steven Mnuchin, the Wall Street Journal reported on Friday, citing people familiar with the matter.

Mark Calabria, director of the Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie, has been pushing to return the government-run entities to the private market. But completing the complicated process before President Donald Trump’s term ends on Jan. 20 is a long shot, the WSJ said. (on.wsj.com/3nAGqcO)

Democratic President-elect Joe Biden, who has pledged to boost affordable housing, is likely to ask Calabria to stall his plans, according to policy experts.

A spokesman for the FHFA declined to comment, while spokespeople for the Treasury did not immediately respond to a request for comment.

Fannie and Freddie have operated under government conservatorship since they were bailed out during the 2008 subprime mortgage crisis. Since then, Washington has struggled to devise a plan to return the pair, which guarantee more than half the nation’s mortgages, to the private sector.

Mnuchin is “supportive of locking in a path to private ownership,” but mindful of disrupting the housing-finance market, the report said, citing one person familiar with the effort. Mnuchin must agree to any changes to the terms of either company’s bailout agreement or government stake.

Calabria has outlined an ambitious course for removing the two firms from conservatorship, which includes reviewing their business activities, shoring up their accounting and raising billions in capital to bolster their safety and soundness.

FHFA on Wednesday said the pair may need to raise more than $200 billion. Calabria has said in the past the money could be raised by retaining more of the firms’ earnings, most of which has historically been sent to the Treasury, and via a potential public offering.

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