Trump to privatize Fannie, Freddie

President Donald Trump is once again floating plans to privatize Fannie Mae and Freddie Mac — a long-running ambition that stalled at the end of his first term.

Now, with Trump back in office and the government-sponsored entities flush with cash, the momentum is back.

On Truth Social, Trump declared he’s “working on” taking Fannie and Freddie “public”, seemingly his way of calling for privatization as the companies are already publicly traded. Details are sparse — no timeline, no formal plan — but the implications are big. Fannie and Freddie support roughly 70 percent of the U.S. mortgage market. So if privatization isn’t handled carefully, it could lead to a spike in mortgage rates and a destabilized market in the middle of a housing affordability crisis.

Trump says the government would maintain an “implicit guarantee,” meaning it would still backstop the agencies in a crisis, but that’s not enough for some. The Mortgage Bankers Association is calling for an explicit guarantee to safeguard taxpayers and borrowers.

Privatization talk is nothing new. Discussions have been happening ever since the lending giants fell into government control in 2008. But this latest push comes as the agencies themselves have undergone a shake-up. Federal Housing Finance Agency Director Bill Pulte — Trump’s handpicked appointee — wasted no time asserting control. Just days into the job, he ousted 14 board members across Fannie and Freddie and named himself chairman of both. He’s been clear about his mission: trim the fat.

Fannie has cut its ESG team and dismissed over 100 employees tied to a donation scam. Its multifamily division has been revamped, with longtime economist Kim Betancourt out and two top multifamily executives on their way out too.

Meanwhile, Fannie and Freddie are dealing with the fallout from risky deals in the multifamily space. Fannie recently reserved $752 million for potential credit losses — some tied to fraud, others to troubled loans. Among those in the hot seat recently: Tzadik Management, the South Florida firm that went big on South Dakota apartments and now finds its properties in bankruptcy, owing $47 million to Fannie. While Tzadik hasn’t been criminally charged, Fannie warned the firm was possibly starving properties of operating cash and neglecting tenants

Other agency borrowers have faced worse: Moshe Silber, whose firm borrowed from Fannie, is now serving time for mortgage fraud and is just one of eight real estate players the agency placed on its blacklist. Fannie has also taken aim at Chicago developer Michael Lerner, who’s embroiled in a messy family feud that’s dragged multiple properties into receivership and bankruptcy.

All this raises the central question: Can Fannie and Freddie be safely fully handed back to private investors while still protecting the housing market?

Trump seems to think so. Or at least he is betting that the public and political appetite for privatization has changed.

There was plenty of more news this week outside of Trump’s post. An $80 million Park Ave penthouse is at the center of a lawsuit against the Zeckendorfs, Douglas Elliman lost a longtime exec and Chicago brokerages clashed over Clear Cooperation.

Zeckendorfs out billionaire as unhappy buyer of $80M penthouse

Billionaire investor Orlando Bravo was revealed as the buyer of the 520 Park Avenue penthouse at the center of his lawsuit against Arthur and William Lie Zeckendorf over claims that a future neighboring skyscraper will ruin his Central Park views. Bravo, who was unidentified when he sued the developers in March, alleges the developers failed to disclose “secret plans” for the obstructing tower, accusing them of using insider knowledge to mislead him and his wife.

Elliman’s former Western region CEO exits after 34 years as team splits

Douglas Elliman’s former Western region CEO, Stephen Kotler, has departed the brokerage after 34 years. His son Max, who is a broker, is joining the Corcoran Group’s New York office, and Stephen’s brother Michael and his seven-person group will remain at Elliman. Kotler wasn’t alone this week. Elliman also lost Beverly Hills-based luxury agent Ernie Carswell and his 15-person team, a group of longtime Aspen agents and top Palm Beach agent Gary Pohrer.

Chicago brokers fight it out over pocket listings

Chicago brokerages are butting heads over the National Association of Realtors’ Clear Cooperation Policy, with larger firms ready to ditch it while smaller firms fight for survival. Clear Cooperation requires properties to be listed on the MLS within one business day of public marketing, and continues to be a hot debate topic and the subject of multiple lawsuits in the past few years.

Swire sells Miami site planned for office supertall to Melo for over $200M

Swire Properties sold a prime Brickell development site to Melo Group for $211.5 million in an all-cash deal. The 2.8-acre site was previously earmarked for the One Brickell City Centre office supertall, a 1,000-foot tower scrapped earlier this year due to Miami’s cooling office market.

Bankrupt 172 Madison units get the “Owning Manhattan” treatment

Brokers from Ryan Serhant’s eponymous brokerage are slated to sell five residential condo units at Yitzchak Tessler’s troubled 172 Madison property that he’s planning to turn over to his lender, ArcPe. Serhant agent Jordan Hurt announced a pre-sale launch party with fellow “Owning Manhattan” cast members at the former site of the infamous Le Penthouse.

Texas is asking for lawsuits in crackdown on housing tax loophole

Gov. Greg Abbott just signed legislation to close a loophole that’s allowed multifamily investors to remove billions of dollars worth of property from tax rolls in Texas’ biggest cities. But, the loophole’s biggest critics say the law goes too far. Over the past year, media outlets across the state have detailed the abuses of “traveling” housing finance corporations, chronicling how multifamily investors misused the program by partnering with affordable housing entities in far-flung counties to secure property tax exemptions in big cities.

Lenders sue Fortis, Kestenbaum over troubled Boston tower

Fortis Property Group and CEO Joel Kestenbaum are facing new legal trouble as their lenders sued to recover $83 million in unpaid debt tied to Boston’s One Lincoln Street. The lawsuits come months after BDT & MSD Partners and DivcoWest took over the 36-story office tower at a foreclosure auction.

Foreclosure looms for billionaire Charles Cohen’s Houston asset

Troubled billionaire Charles Cohen’s office woes are cropping up in Houston. Foreclosure is looming for Cohen Brothers Realty-owned Decorative Center Houston. New York-based lender Ladder Capital Finance claims Cohen defaulted on a $50 million loan provided in 2014. The 500,000-square-foot building in Uptown Houston could be auctioned Tuesday if they don’t reach a deal.