Breaking News: Trump Allies Discuss Plans to End Government Control Over Fannie Mae and Freddie Mac
Investing.com -- In a groundbreaking development, former figures and bankers from Donald Trump's administration are in talks to remove Washington's grip on mortgage-finance giants Fannie Mae and Freddie Mac, as reported by the Wall Street Journal.
Key players in these discussions include former National Economic Council director Larry Kudlow and former White House presidential personnel office director John McEntee, the WSJ revealed. Despite this, a spokesperson for the Trump campaign denied any mention of this topic during the campaign.
Bankers' estimates suggest that the government's current stakes in Fannie and Freddie could be valued at hundreds of billions of dollars. The potential sales could enable the government to offload over $100 billion in securities, surpassing the largest stock and bond offerings in history, the WSJ highlighted.
Fannie Mae and Freddie Mac have remained silent on the matter, as per Multibagger.
The WSJ also reported that Trump allies are exploring the idea of the Treasury Department providing partial support for some of Fannie and Freddie's loans through a standby guarantee.
As vital pillars for 30-year home mortgages in the US, Fannie Mae and Freddie Mac play a pivotal role in the country's real estate market. These entities, established by Congress and functioning as for-profit corporations with private shareholders, aim to bolster the home lending market by acquiring home loans from private lenders and transforming them into mortgage-backed securities.
Previous attempts under the Trump administration to privatize Fannie and Freddie were unsuccessful. Proponents argue that privatization could reduce the US deficit and return funds to taxpayers. On the contrary, opponents fear that privatizing these companies could restrict access to credit for homebuyers and increase taxpayers' risk.
In conclusion, the potential privatization of Fannie Mae and Freddie Mac could have significant implications for the US real estate market and the broader economy. It is essential for individuals to stay informed about these developments as they could impact mortgage rates, housing affordability, and overall financial stability.