12.15.20
In an interview with the Wall Street Journal, Treasury Secretary Mnuchin suggested that he is unlikely to support actions that would end the current state of the government conservatorships of Fannie Mae and Freddie Mac. Recent reports suggested that Secretary Mnuchin was considering amending the Preferred Stock Purchase Agreements that currently govern the conservatorship, and instead instituting a consent order that would chart a course out of conservatorship. This announcement comes after SFA wrote a letter to Secretary Mnuchin urging him not to undertake actions that could result in the GSEs being released from conservatorship prematurely. The Treasury Secretary went on to say he is focused on steps that would allow the company to build up capital to absorb future losses. “The real issue is how do you get them out of conservatorship?” Mr. Mnuchin said. “You need to raise third-party capital and you need to retain capital. That’s, to me, the issue.”