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Mnuchin Stays Vague On Fannie And Freddie In New Interviews

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Mnuchin Stays Vague On Fannie And Freddie In New Interviews
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On Thursday morning, Treasury Secretary Steven Mnuchin had his first sit-down interviews with Fox Business (Twenty-First Century Fox Inc (NASDAQ: FOXA)) and CNBC since his confirmation. One of the hot-button topics that Mnuchin discussed is the fate of Federal National Mortgage Assctn Fnni Me (OTC: FNMA) and Federal Home Loan Mortgage Corp (OTC: FMCC). Shares of the two government-sponsored enterprises (GSEs) are down roughly 30 percent this week after an appeals court upheld a 2014 ruling that shareholders may not sue over the legality of the government’s net-worth sweep.

Vague On Fannie And Freddie

The ruling may leave the fate of Fannie Mae and Freddie Mac in the hands of Mnuchin for the time being. When CNBC asked Mnuchin about his plan for Fannie and Freddie, he stayed fairly vague on the issue.

Related Link: Steven Mnuchin May Now Be Fannie Mae And Freddie Mac Investors' Last Hope

“It’s something I’ve already started working on,” Mnuchin said. “I met with Mel Watt this week. I had a very good conversation. I’ve met with Jeb Hensarling and we’ve talked about various different issues.”

Mnuchin reiterated that the administration is committed to housing reform, suggesting that Fannie and Freddie shareholders will likely have some form of resolution within the next four years.

“They’ve been sitting there for too long of a period of time, and we need a solution. We’re going to look at this. I think this will be one of the areas where hopefully we will have a bipartisan solution. I think there’s a lot of people that share the view that we need to do something with them,” Mnuchin said.

Shareholders Paying Attention

Fannie and Freddie shareholders are hoping that Mnuchin will opt to begin recapitalizing the two entities in preparation to return control to shareholders on the public market. Unfortunately, Fannie and Freddie investors now have more waiting ahead.

“This is something we’re going to study carefully, so I don’t think you’re going to see something right away from us, whereas tax reform is a near-term issue. But this is definitely on the agenda,” Mnuchin concluded.

Image Credit: By DonkeyHotey (Steven Mnuchin - Caricature) [via CC BY 2.0], via Wikimedia Commons

Posted-In: CNBC fannie mae Fox BusinessNews Politics Economics Media General Best of Benzinga

 

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