A breakup of Fannie and Freddie could be in the cards

Two senators are weighing a plan that would split the mortgage giants into single-family, multifamily pieces

New York /
Jun.June 27, 2017 10:30 AM

Two senators are seriously looking at a plan that would split Freddie Mac and Fannie Mae into single-family and multifamily parts.

Tennessee Republican Bob Corker and Virginia Democrat Mark Warner have devised the plan, Bloomberg reported, citing sources. Both senators are working on a bipartisan overhaul of the mortgage giants, according to the publication. The aim is to create more competition in the secondary mortgage market, the sources said.

Many Democrats and Republicans have said they want to end Fannie and Freddie’s duopoly. Since the government took control of the giants in 2008, it has spent $187.5 billion on them. Overhauling the system is said to be a priority for the White House, and the Senate Banking Committee is looking to reduce the government’s role in the $10 trillion mortgage market.

Both senators are members of the committee, which is scheduled to hold another hearing on housing finances later this month. Among Warner and Corker’s proposals is to split Fannie and Freddie’s single-family businesses from their multifamily business, which finance apartment rentals. The single-family business may then be divided into even smaller companies, the sources told Bloomberg.

Last week, Warner told the Mortgage Bankers Association conference that he and Corker have agreed on a number of matters, including developing a system that preserves the 30-year mortgage. [Bloomberg] Miriam Hall


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
Real estate stocks push up this week as U.S.-China trade tensions ease
Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Gov. Andrew Cuomo and Mayor Bill de Blasio (Getty, iStock)
De Blasio bumps up city vouchers as state increase stalls
De Blasio bumps up city vouchers as state increase stalls
Donald Trump and the Trump International Hotel & Tower in Chicago (Getty, iStock)
Donald Trump is owed $1M tax refund on Chicago skyscraper
Donald Trump is owed $1M tax refund on Chicago skyscraper
Rep. Alexandria Ocasio-Cortez, President Joe Biden and House Speaker Nancy Pelosi (Getty)
Democrats urge Biden to extend eviction ban after House effort falls short
Democrats urge Biden to extend eviction ban after House effort falls short
Photo Illustration of Donald Trump (Illustration by Kevin Rebong for The Real Deal)
Treasury Department must give Trump’s tax returns to Congress: DOJ
Treasury Department must give Trump’s tax returns to Congress: DOJ
Mayor Steven Fulop (Getty, iStock)
Jersey City to provide up to $10K more rent relief per tenant
Jersey City to provide up to $10K more rent relief per tenant
Susan Rice (Getty, iStock)
Susan Rice to co-chair home appraisal inequity task force
Susan Rice to co-chair home appraisal inequity task force
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...