[ad_1]
Topline: The Trump administration on Thursday proposed a plan to get mortgage buyers Fannie Mae and Freddie Mac out of the government's tutelage, where they have been for 11 years after being rescued by the government in the aftermath of the country's financial crisis. 2008.
- This plan includes a series of general legislative and administrative proposals to reduce the government's role in the mortgage market. & Nbsp;
- The proposals include the privatization of Fannie Mae and Freddie Mac, but the government would still grant a line of credit to businesses in case of emergency, subject to the payment of a periodic fee so that taxpayers do not lose anything. & Nbsp;
- The proposal would also open the market to private competitors.
- The move will not affect current mortgages.
What are Fannie Mae and Freddie Mac? The two companies do not lend directly to homebuyers. Instead, they buy existing mortgages from lenders, such as banks, and store them or condition them into securities for sale to other investors. Together, Fannie and Freddie support half of the mortgages in the US market.
Key backgroundThe government took direct control of Fannie Mae and Freddie Mac in 2008, fearing that their collapse would further degrade the US real estate market. The Treasury Department released more than $ 190 billion and the companies returned their profits to the Treasury Department.
After the fiasco, members of both parties said they wanted to abolish corporations, which are private companies but were created by Congress, but Trump's plan reverses its position.
Unresolved issue: The plan did not address the question of what would become of the government's significant involvement in business.
And after: A large number of proposals are legislative solutions requiring congressional approval. There was no deadline for privatization, but the Treasury Department left it to the Federal Housing Finance Agency to determine when companies could "operate in a safe and healthy manner without undue systemic risk".
Further reading: Read the full plan of the Treasury Department right here.
">
Topline: The Trump administration on Thursday proposed a plan to get mortgage buyers Fannie Mae and Freddie Mac out of the government's tutelage, where they have been for 11 years after being rescued by the government in the aftermath of the country's financial crisis. 2008.
- The plan includes a series of general legislative and administrative proposals to reduce the government's role in the mortgage market.
- The proposals include the privatization of Fannie Mae and Freddie Mac, but the government would still grant a line of credit to businesses in case of emergency, subject to the payment of a periodic fee so that taxpayers do not lose anything.
- The proposal would also open the market to private competitors.
- The move will not affect current mortgages.
What are Fannie Mae and Freddie Mac? The two companies do not lend directly to homebuyers. Instead, they buy existing mortgages from lenders, such as banks, and store them or condition them into securities for sale to other investors. Together, Fannie and Freddie support half of the mortgages in the US market.
Key backgroundThe government took direct control of Fannie Mae and Freddie Mac in 2008, fearing that their collapse would further degrade the US real estate market. The Treasury Department released more than $ 190 billion and the companies returned their profits to the Treasury Department.
After the fiasco, members of both parties said they wanted to abolish corporations, which are private companies but were created by Congress, but Trump's plan reverses its position.
Unresolved issue: The plan did not address the question of what would become of the government's significant involvement in business.
And after: A large number of proposals are legislative solutions requiring congressional approval. There was no deadline for privatization, but the Treasury Department left it to the Federal Housing Finance Agency to determine when companies could "operate in a safe and healthy manner without undue systemic risk".
Further reading: Read the full plan of the Treasury Department here.