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Trump official to pressure Congress to privatize Freddie and Fannie

FHFA director Mark Calabria (Credit: Federal Housing Finance Agency and Getty Images)

FHFA director Mark Calabria (Credit: Federal Housing Finance Agency and Getty Images)

A decade after Fannie Mae and Freddie Mac were put under government control, a Trump administration-appointed regulator is stepping in to try again to hand the mortgage finance companies back to the private sector.

“If I do nothing and don’t push, then I’m fairly certain Congress will do nothing,” Mark Calabria, the Trump-appointed head of the Federal Housing Finance Agency, said, according to the Wall Street Journal. “They have a lot of priorities, so how do I knock this up a few levels in the priority chain for Congress?”

The push follows multiple failed attempts to do privatize the lenders. Together, Freddie and Fannie buy low cost housing loans and repackage them as securities, and guarantee almost half of the $10 trillion housing market.

Ahead of the financial crisis, both companies took on more risk than they could take, and were bailed out by the government after loans went sour during the crisis.
In March, the Trump administration said it was finalizing a plan to hand over the companies to the private sector. If that happens, those low cost mortgages could become more expensive unless additional legislation is also introduced, Calabria said. [WSJ] — David Jeans 

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