Reform of the bailed-out mortgage giants Fannie Mae and Freddie Mac is an early priority for the Trump administration, a top adviser to President Trump said Friday.
Gary Cohn, the head of Trump's National Economic Council, said in an interview on CNBC Friday that overhauling the two government-sponsored enterprises is "definitely on our agenda."
Cohn, a former top official at Goldman Sachs, made several media appearances Friday morning to outline a broad range of planned Trump administration actions on economic policy.
The top priorities, he said, were regulatory reform, tax reform and changing Obamacare. But housing finance reform may be closer to the top of the list than the housing industry expected.
Steven Mnuchin, Trump's treasury secretary-designate, is spending a lot of time working on reform to Fannie and Freddie and it is "one of his early priorities," Cohn said.
Mnuchin has yet to be confirmed by the full Senate.
In his confirmation hearing, Mnuchin, also a former Goldman Sachs banker and a regional banker, suggested that he aimed to remove Fannie and Freddie from the government's possession, and institute housing finance reform that would protect taxpayers and provide liquidity for home loans.
Fannie and Freddie have stayed in government custody since being bailed out in late 2008.
Legislation to reform them has stalled amid differences over the role of government in providing guarantees for mortgage-backed securities and the extent to which the system should subsidize affordable housing.
The Obama administration sought to eliminate Fannie and Freddie as part of reform, although Obama never pushed hard for that outcome. Investors in the two businesses have taken comfort from Mnuchin's remarks on ending government control of them.