Trump Taking Fannie, Freddie “Public”

President Donald Trump has advanced his plans to release Fannie Mae and Freddie Mac from government control.

In a post on his Truth Social platform, Trump said he is “working on” taking the companies public. The president didn’t provide specifics on the process or timeline in his post.

Trump said the government would retain its implicit guarantees to backstop the agencies; that could prove important, as the process of removing Fannie and Freddie has the potential to destabilize the mortgage market.

The implicit guarantee suggests the federal government would step in before Fannie or Freddie could default; amid the Great Recession, they were placed in a government conservatorship as the U.S. Treasury supplied a $2.25 billion line of credit.

This is the second time in a week that Trump has publicized his desire to release Fannie and Freddie from government control. Last week, he said he was giving “very serious consideration” to the idea of privatizing the government-controlled enterprises, discussions that have been going on in administration circles since early spring.

The Mortgage Bankers Association is among those pushing for an explicit guarantee, HousingWire reported. The organization’s president and chief executive officer said in an interview last week with the outlet it was necessary to “protect taxpayers, consumers and our housing finance system.”

The administration was reported in recent months to be entertaining the idea of transferring the Treasury Department’s ownership of the mortgage companies to a sovereign wealth fund. While Trump announced the sovereign wealth fund early during his second term, it has yet to come to fruition.

One proposal suggested the enterprises could raise between $20 billion and $30 billion from investors, estimating they could be valued at more than $330 billion combined. That would put the government’s stake in the enterprises at more than $250 billion, creating a potential windfall for the government.

Privatization has been on the table since the mortgage giants fell under government control in 2008. An attempt to take the enterprises private fell by the wayside in the waning days of Trump’s first administration.— Holden Walter-Warner