Fannie-Freddie Investors Should Be Paid, Ex-Treasury Aide Says

Fannie Mae and Freddie Mac’s existing shareholders should be compensated as part of any overhaul that ends U.S. control of the companies, according to a former top adviser to Treasury Secretary Steven Mnuchin.

Craig Phillips, who was Treasury’s point man on housing finance issues before stepping down in June, said treatment of investors who hold common or junior preferred shares of Fannie and Freddie is a matter that must be dealt with as the government moves to end its decade-old conservatorship of the companies.

“Fannie Mae and Freddie Mac are public companies, with the rights of the existing ...