Fannie Mae and Freddie Mac were bailed out by the government during the housing crisis nearly 17 years ago. The Trump administration is considering letting them go private again.
Fannie Mae and Freddie Mac, two giant mortgage finance firms, have been controlled by the federal government for nearly 17 years, but a long-dormant idea of making them private businesses is starting to make the rounds in Washington again.
Scott Turner, the secretary of Housing and Urban Development, said in an interview this week that coordinating the effort to privatize the two firms would be his priority. One of President Trump’s backers, the hedge fund investor William A. Ackman, is calling on the president to quickly move forward on the privatization.
But Fannie and Freddie underpin the nation’s $12 trillion mortgage market, so they need to be handled with care. Scott Bessent, the Treasury secretary, said last month that any plan for ending the so-called conservatorship of the two firms “should be carefully designed and executed.”
The last time Mr. Trump was president, a number of his advisers took steps toward coming up with a plan for releasing Fannie Mae and Freddie Mac from government control. In the end, the first Trump administration took no action, and the Biden administration put the issue on the back burner.
Here is a quick primer on why Fannie and Freddie are so critical to the mortgage market and some of the issues likely to come up in the debate over how to end the conservatorship.
What do Fannie and Freddie do?
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Source: Economy - nytimes.com
