Fannie Mae, Freddie Mac should be turned into utilities, says trade group

Washington

A POWERFUL housing trade group is wasting no time in pushing the Trump administration and Republican-led Congress to address one of the last unresolved issues from the financial crisis, outlining a proposal Tuesday to overhaul mortgage-finance giants Fannie Mae and Freddie Mac.

The Mortgage Bankers Association plan would make Fannie and Freddie privately-owned utilities and cap their returns on capital. It would also turn the government's implicit backstop of the companies into an explicit guarantee of the mortgage-backed securities they sell to investors.

The group's paper is an attempt to influence any effort President Donald Trump and lawmakers make to reform the US housing-finance system, which crashed in 2008 and has been stuck in limbo under government control ever since. The fates of Fannie and …