President Donald Trump said on Wednesday that he will give “a very serious consideration” to take the mortgage giants Fannie Mae and Freddie Mac Public, more than 15 years after being taken under the control of the government to stabilize the American economy following the collapse of the 2008 housing market.
“I have a very serious consideration to bring Fannie Mae and Freddie Mac Public,” wrote the president on his social platform, Truth Social. “I’m going to speak with the secretary of the Treasury Scott Bessent, the trade secretary Howard Lunick, and the director of the Federal Housing Finance Agency, William Pulte, among others, and will make a decision in the near future.”
Why it matters
Trump has been trying for a long time to take the two mortgage companies, which guarantee most of the mortgages made in the country, public, but an attempt to privatize companies during his first mandate has not succeeded.
He swore to try again if he was elected during his presidential campaign in 2024 and now seems determined to keep this promise. But some economists fear that the privatization of Fannie Mae and Freddie Mac at a time of growing uncertainty around the American economy and historically high mortgage rates could disrupt the mortgage market, making payments even higher for daily Americans.
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What to know
Fannie Mae and Freddie Mac were private companies, but were placed in a guardianship under the Federal Housing Finance Agency (FHFA) after the breakup of the 2007-2008 housing bubble, when the American housing market has crashed and triggered the so-called great recession.
The two companies, which mainly buy mortgages from lenders and reconditions them for investors, support around 70% of all American mortgages, or 16 billions of dollars, and play a crucial role in maintaining the balance of the American mortgage.
While Trump has weighs the possibility of taking the two mortgage giants for some time now, he thinks that “the moment would seem fair” now because “Fannie Mae and Freddie Mac are doing very well, throwing a lot of money”, as he wrote on Truth Social.
What people say
Treasury secretary, Scott Bessent, told Bloomberg in an interview in February: “The priority for a release from Fannie and Freddie, the most important metric that I watch, is any study or index that mortgage rates would increase.”
Gary Labarbera, President of the Building and Construction Council of the Grand New York and member of the Housing for US Coalition, said on Wednesday: “President Trump is right to release Fannie and Freddie. But even better, let’s use the product – some 250 billion dollars – to build middle -class housing for American workers by American workers. Housing for us is ready to work with President Trump to get there.”
Bill Pulte, chief of the FHFA, told CNN in March: “Fannie and Freddie should not be in tutelage forever. But it is essential to ensure any discussion on the release of guardianship needs not only to ensure security and solidity, but how it would affect mortgage rates.”
What happens next
Previous attempts to withdraw Fannie Mae and Freddie Mac outside the supervisory of the government have failed, and it is not clear if the American president can succeed this time. Trump did not offer a lot of details on how he plans to attempt his attempt this time, but invited voters to “listen” to his next movements.
If successful, this decision could have a huge impact on the American mortgage and housing markets.
