With the Trump Administration expected to release its plan for overhauling Fannie Mae and Freddie Mac, the Wall Street Journal outlined several details behind the decision to make changes to the two entities, which have been in government conservatorship since the 2008 financial crisis. While there is bipartisan support for an end to Fannie and Freddie’s conservatorship, the logistics of how it would be done make Congress unlikely to act, especially in an election year. “The report is likely going to have a lot of language about embracing congressional reform and reducing the GSE footprint, which most market participants support. But if the real intent is to end conservatorship administratively, then the MBS market will react very negatively,” said Michael Bright, SFA CEO. There is no clear path at the moment, but talks of ending Fannie and Freddie’s conservatorship continue.
Read more via The Wall Street Journal.