Treasury official hired to fix Fannie and Freddie is leaving

When Craig S. Phillips, a veteran Wall Street mortgage trader, agreed to join the Treasury Department as a top aide to Secretary Steven Mnuchin in 2017, his mandate was to overhaul the way that American home loans are guaranteed and then traded by the federal government.

More than two years later, with that ambitious agenda far from fruition, Phillips is returning to the private sector.

Phillips told Treasury D epartment employees Thursday that he planned to leave the government next month, according to a person familiar with the conversation who was not authorized to speak publicly. He informed colleagues that he expected to return to Wall Street but inside and out, and he’s in had not lined up a new job. a real power seat.”

A Treasury spokesman had Phillips, who was among no immediate comment. the first people on Wall

During his 21/2 years at Trea- Street ever to package and sury, Phillips helped create a sell mortgages to investors, blueprint for relaxing finan- was expected to apply his cial regulations imposed after experience to the problem of the 2008 financial crisis. how to get Fannie and Fred

His departure adds uncer- die back into private hands, tainty to the fates of Fannie instead of operating under Mae and Freddie Mac, the federal control. two giant mortgage finance Prominent investors had companies that have been in bet that Phillips, who spent government conservatorship 12 years at Morgan Stansince the crisis. The compa- ley and ran the investment nies provide guarantees on bank’s mortgage trading desk the majority of U.S. home before the 2008 financial criloans, making it much eassis, would fortify Fannie and ier and safer for banks to Freddie with taxpayer money provide customers with the and then release them into mortgages at affordable inter- the hands of private invesest rates. tors without making funda

“He’s critically important,” mental changes to the comsaid David Stevens, the forpanies’ structures. mer chief executive of the Investors snapped up FanMortgage Bankers Associnie and Freddie’s shares in ation. “He knows this stuff anticipation.