Treasury Secretary Steven Mnuchin said yesterday that the Trump administration plans to require Fannie Mae and Freddie Mac to begin paying a fee for support from the Treasury Department in exchange for a change to the mortgage-finance companies’ status that will allow them to retain their earnings, the Wall Street Journal reported. Mnuchin, testifying before Senate lawmakers, said he hopes to quickly reach a deal with the regulator of Fannie and Freddie, the Federal Housing Finance Agency, to amend the terms of the firms’ government bailout agreements that would end an existing sweep of nearly all their profits to the Treasury. The change is seen as the first major step toward privatizing the companies after 11 years under government control. “We would allow a significant amount of capital to be accumulated, but in return for that make sure that the taxpayers are compensated for the ongoing Treasury support,” Mnuchin told the Senate Banking Committee, repeating key points of an administration report released Thursday. Fannie and Freddie don’t make loans but instead buy them from lenders and package them into securities that are sold to other investors. Figuring out how to refashion the companies remains the largest single piece of unfinished business from the financial crisis. The government assumed control of the firms in 2008 during the height of the crisis to prevent their failure, which officials’ feared would trigger a broader collapse in the housing market.
