President-elect Donald J. Trump has indicated that he intends to name two people with mortgage ties to his cabinet. One previously owned an Ocwen Financial Corp. unit, and the other wants to privatize the government-sponsored enterprises.
A statement Wednesday from Trump said that he intends to nominate Steven Mnuchin for the role of Treasury Department Secretary. In addition, Trump said he intends to nominate billionaire Wilbur Ross as Secretary of the Department of Commerce.
Mnuchin, who is a former Goldman Sachs Group Inc. partner, was among a group of investors behind the OneWest Bank FSB acquisition of failed IndyMac Federal Bank FSB from the Federal Deposit Insurance Corp. in 2009.
Ross’
WL Ross & Co. LLC was the owner of Homeward Residential Holdings Inc., which Ocwen acquired in 2012.
In an interview Wednesday on Fox Business, Ross noted that the average small bank now has more compliance staff than lending officers.
“That’s a very flawed business model,” he said.
Ross pointed to Fannie Mae and Freddie Mac, which are two financial institutions that the government has had the most influence on.
“They’re not exactly role models,” he said.
In the same interview, Mnuchin said Fannie and Freddie need to be privatized and get out of government ownership.
“It makes no sense that
these are owned by the government and have been controlled by the government for as long as they have,” Mnuchin stated. “In many cases this displaces private lending in the mortgage market.”
But he noted
that when the pair of GSEs are restructured they will be absolutely safe and not be taken over again.
Mnuchin said that resolving Fannie and Freddie are among the top-10 issues to get done in a Trump administration.
And it will be done reasonably fast.
“This team will be instrumental in implementing the president-elect’s America First economic plan that will create more than 25 million jobs over the next decade,” Trump’s statement said.
