Castro non-relevant to FNMA

The share price of FNMA dipped by 3% due to the speech of the US housing nominee of HUD . See news

WASHINGTON, June 17 (Reuters) – President Barack Obama’s nominee to lead the Department of Housing and Urban Development, Julian Castro, urged lawmakers on Tuesday to move forward with efforts to shutter Fannie Mae and Freddie Mac , saying the current housing finance system is not serving Americans well.

Castro told the Senate Banking Committee that if confirmed he would seek to ensure taxpayers are never again on the hook in a housing crisis as they were when the government stepped in to bailout the two mortgage financiers.

“I absolutely believe that there are better alternatives than what we have in place with this duopoly and with this conservatorship,” Castro said.

Freddie Mac and Fannie Mae were seized by government in 2008 as losses on mortgages they backed threatened their solvency. The companies, which own or guarantee about 60 percent of all U.S. mortgages, eventually soaked up $187.5 billion in taxpayer funds. They are now profitable and have returned more to the government in dividends than they received in aid.

However, bear in mind that FNMA is now governed by Treasury/FHFA, not HUD. Castro can say anything he wants because he is hand-picked by Obama, his future responsibility is not directly relevant to FNMA.

I took this dip opportunity and bought some shares.