Treasury Secretary Scott Bessent indicated that Fannie Mae and Freddie Mac could be released from government conservatorship, emphasizing concerns about potential rises in mortgage rates. He noted the current priority is tax policy, with any decisions about conservatorship closely linked to studies on long-term mortgage rates. The firms have been under conservatorship since 2008 due to significant losses, though they've since returned to profitability. The U.S. Treasury currently retains most profits while prior shares continue to have some value.
Last month, new Treasury Secretary Scott Bessent said that the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) could get released from government conservatorship if doing so doesn't push up mortgage rates.
Bessent suggests that their goal of lowering mortgage rates could take precedence over releasing Fannie Mae and Freddie Mac from conservatorship.
While the U.S. Treasury owns the majority of their profits through senior preferred stock agreements, the common and preferred shares that existed before conservatorship were never fully wiped out.
The U.S. Treasury provided a bailout to keep them afloat, and they have remained under government control ever since, despite returning to profitability.
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