Charlie Gasparino reports the Treasury has begun “holding significant meetings with Wall Street executives to come up with a solution to Fannie (OTC: FNMA) and Freddie (OTC: FMCC).” Sources on Wall Street tell Gasparino they believe Fannie Mae and Freddie Mac will be combined “into one agency.”
More on the report, courtesy of Fox Business Networks
On how the Treasury and Wall Street are working together to solve the problems of Fannie Mae and Freddie Mac:
“What we have heard is over the last couple of weeks the Treasury began holding significant meetings with Wall Street executives to come up with a solution to Fannie and Freddie. Both of the failed mortgage agencies are in conservativeship. What they are trying to do is find a way to revive them in a way that is least hurtful to taxpayers.”
On the future of Fannie Mae and Freddie Mac:
“One of the options is the notion of combining Fannie and Freddie into a single agency and working through the issues that would prevent them from revitalizing. They have toxic assets on their books. That’s what caused their demise. The Wall Street guys believe if you combine those agencies it’s easy to deal with those toxic assets. Wall Street guys think that’s what’s going to happen. Both of those agencies are going to go and Treasury is going to move them into one agency.”
On why Fannie and Freddie were not included in financial reform:
“We have also confirmed that around the time of financial reform, there was a decision made mainly by Barney Frank not to include Fannie and Freddie into the broader financial reform package. Because of all these issues. A lot of republicans want to kill those agencies. Take them over, put them out of business. Democrats obviously don’t want to do that. Housing policy is a big part of their plank.”
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