Treasury Secretary Steven Mnuchin told Fox Business News on Monday, that changing the current status of Freddie Mac and Fannie Mae is something that he is "very focused on." In an interview with commentator Maria Bartiromo, the Secretary said he doubts anything will get done in this Congress, but he is determined to have a fix for the government sponsored enterprises (GSEs) and that "we don't leave them in conservatorship for the rest of time."
Bartiromo asked what he meant by "a fix"? "Do you mean they will be publicly held again?"
Mnuchin said he would not comment on what form the "fix" might take, "but having a government guarantee on a 30-year mortgage is important for liquidity in the market." There are, he said various solutions and whatever is done will need to be done on a bi-partisan basis. He said he has had conversations with both Republicans and Democrats and unfortunately doesn't see this being a focus of this Congress. He added he intends to return to the topic next year and it will be a big issue for him post the elections.
He added that the administration would also have the ability to replace the Federal Housing Finance Agency (FHFA) director next year. "That is something we are going to look at and make sure we have someone in that job who will support the (administration's) agenda."
Bartiromo asked how the housing markets are doing, commenting that in their last interview there were concerns about how the tax cut might affect those markets, primarily that there would be an exodus from those states that lost the state and local tax (SALT) deductions
Mnuchin said he was not concerned and the administration is not seeing any negative impacts. "I think again, for mostly all Americans we focused on the SALT deductions, and for the middle class the way the overall package worked it was helpful for them. Obviously in certain areas at the high end there clearly were higher taxes as a result of losing the state and local taxes but we haven't seen any effect on the housing markets," he said.
