Latest news with #mortgagefinance
Bloomberg
4 days ago
- Business
- Bloomberg
Senators Ask Housing Finance Agency to Pause Plans to Privatize Fannie, Freddie
A group of Democratic senators, including Elizabeth Warren and Chuck Schumer, asked the director of the Federal Housing Finance Agency to pause any efforts to privatize mortgage finance companies Fannie Mae and Freddie Mac. President Donald Trump said on social media last month that he's considering a public stock offering for the two government-backed enterprises, triggering speculation that the administration could seek to end government ownership of the two companies. FHFA director William Pulte has confirmed the administration is studying ways to carry out a public offering for the companies.
Reuters
22-05-2025
- Business
- Reuters
Fannie, Freddie OTC shares soar after Trump comments on spin-off
May 22 (Reuters) - Over-the-counter (OTC) shares in Fannie Mae ( opens new tab and Freddie Mac ( opens new tab rose sharply on Thursday after U.S. President Donald Trump said he was considering taking the U.S. mortgage finance firms public. The United States Treasury owns preferred shares in the firms and warrants to purchase about 80% of their common stock, a holdover from a rescue during the 2008 housing loan crisis. The spinoffs would be a win for conservatives who have long advocated for privatising government-affiliated firms, such as the U.S. Postal Service and passenger rail operator Amtrak. But moving housing loans outside the government umbrella could raise mortgage costs for home buyers. In a post on Truth Social, Trump said he was "giving very serious consideration" to the spin-off and would decide in the near future. He added he would speak on the matter with Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Federal Housing Finance Director William Pulte and others. In premarket trades, Fannie shares were up 40.9% at $10.50 while Freddie shares were up 52.6% at $8.58. The U.S. government could get a windfall of more than $250 billion from a listing of the housing lenders, James E. Thorne, chief market strategist of Wellington-Atlus Private Wealth, said on X. It may also be a boon to Trump ally Bill Ackman, whose Pershing Square Capital Management (PSHP.L), opens new tab is the biggest holder of Fannie's public OTC shares with about 10%, according to LSEG data. Capital Research Global Investors, a unit of the Capital Group, holds about 7.7% of Freddie, the biggest single stake, and 8.8% of Fannie. The two companies have a combined market value of about $12.3 billion. Their shares, which don't trade on major exchanges, have surged more than 260% in the past year, with most of those gains following the November election of Trump, who unsuccessfully pushed to sell off the companies during his first term. Fannie ( opens new tab, formally known as the Federal National Mortgage Association, and Freddie ( opens new tab, the Federal Home Loan Mortgage Corp., operate as for-profit firms with private shareholders. They were created by Congress to expand the national home lending market by buying home loans from private lenders and repackaging them as mortgage-backed securities. Fannie and Freddie suffered overwhelming losses when the U.S. housing market collapsed during the sub-prime mortgage crisis in 2007-2008. Fearing an economic catastrophe, U.S. authorities placed them in conservatorship under the newly created Federal Housing Finance Agency. The companies returned to profitability in 2012 and by 2017 had repaid all the loans they received from the federal government. "Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right," Trump said in his social media post. In February, Bessent said the release of Fannie and Freddie from their conservatorship would depend on mortgage rate implications. Effectively reprivatising the firms may also put them in line for a credit downgrade, as they would "no longer be quasi-sovereign paper," Tolou Capital Management founder Spencer Hakimian said on X. That could in turn lead to an increase in mortgage rates for homebuyers, he added.
Reuters
21-05-2025
- Business
- Reuters
Trump says he's seriously considering taking Fannie Mae and Freddie Mac public
WASHINGTON, May 21 (Reuters) - U.S. President Donald Trump said on Wednesday he will make a decision in the near future about taking mortgage finance firms Fannie Mae and Freddie Mac public, saying that he is giving "very serious consideration" to doing so. In a post on Truth Social, Trump said he will speak with Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Federal Housing Finance Director William Pulte. "Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right," Trump said, without providing further details. Fannie and Freddie, which operate as for-profit corporations with private shareholders, were created by the U.S. Congress to expand the national home lending market by buying home loans from private lenders and repackaging them as mortgage-backed securities. When the housing market collapsed in 2008, Fannie Mae and Freddie Mac suffered overwhelming losses. To avoid catastrophic effects for the U.S. economy, they were placed in conservatorship under the newly created Federal Housing Finance Agency. Previous attempts to rid government control of the organizations, including under Trump's first term in office, have been unsuccessful. In February, Bessent said the release of Fannie and Freddie from their conservatorship would depend on mortgage rate implications. "The priority for a Fannie and Freddie release, the most important metric that I'm looking at, is any study or hint that mortgage rates would go up," Bessent said in an interview with Bloomberg.
