A top U.S. Treasury Department official suggested the White House wouldn’t allow mortgage titans Fannie Mae and Freddie Mac to rebuild capital, rejecting some advocates’ wishes that the companies would move past being government wards.
At the same time, in a speech delivered at a Goldman Sachs housing-finance conference in New York, Michael Stegman, the Treasury’s counselor to the secretary for housing finance policy outlined some of the actions the administration would like to see happen in the absence of a comprehensive housing-finance overhaul.
The speech also marked the first time that the Obama administration outlined what steps it thinks the Federal Housing Finance Agency, which regulates Fannie and Freddie, should take in the absence of legislation to reform the companies, which largely has been on the back burner since last summer.
Together, the sentiments expressed in the speech amount to a tacit acknowledgment by the administration that legislation to overhaul the housing-finance system might not happen. As well, the speech threw cold water on a growing narrative — stirred by renewed bailout worries after relatively weak fourth-quarter earnings reports from Fannie and Freddie — that the administration might move to recapitalize the companies.
