US Treasury calls for recapitalizing Fannie, Freddie in long-awaited overhaul plan

WASHINGTON: The U.S. Treasury on Thursday said the government should draw up a plan to begin recapitalizing mortgage giants Fannie Mae and Freddie Mac, while calling on Congress to pen comprehensive housing reform that would allow the pair to be safely freed from government control.

On Thursday, a senior Treasury official stressed the need to rebuild Fannie and Freddie's capital, but said a specific plan would still need to be carefully negotiated with the Federal Housing Finance Agency , which oversees the mortgage giants. If Congress fails to create a new guarantee, the Treasury said it would use its existing investment in the companies to continue to provide a backstop, signaling it may be prepared to stand behind the companies indefinitely."The Trump administration is committed to promoting much needed reforms to the housing finance system that will protect taxpayers and help Americans who want to buy a home,” said U.S. Treasury Secretary Steven Mnuchin in a statement.

Source: Loan Digest (loandigest.net)

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