Senate Democrats Push Back on Fannie, Freddie IPO

Partisan battle lines are being drawn over the future of Fannie Mae and Freddie Mac.

A trio of Senate Democrats — Elizabeth Warren, Cory Booker and Chuck Schumer — fired off a letter to Federal Housing Finance Agency director Bill Pulte on Friday morning, the Wall Street Journal reported. The letter touched on several topics, including the possible initial public offering of the two government-sponsored enterprises.

Earlier this month, it was reported that Donald Trump’s administration was pursuing a plan to sell the mortgage giants’ stock as soon as the end of the year. The plan would value the two entities at a combined $500 million or more.

The administration anticipates the offering could raise roughly $30 billion and the IPO would be one of the biggest in history, should it come to pass; previous attempts to privatize the mortgage giants in the last decade and change have fallen flat.

The veteran lawmakers are urging the FHFA to pause the process and study the impact taking Fannie and Freddie public would have on mortgage rates, particularly whether or not it would cause them to spike.

Analysts fear mortgage rates will rise, especially if the government doesn’t come to Fannie and Freddie’s rescue if they hit problems. Treasury Secretary Scott Bessent has said the process is moving at a deliberate pace to ensure mortgage rates don’t surge.

In a statement, Pulte took the combative route embodied by the rest of the administration, saying that, “Elizabeth Warren, Jerome Powell, and Joe Biden made housing unaffordable these last four years, and we are doing everything we can to reverse their damage, including removing mortgage fraud.”

Incidentally, the senators also called on Pulte’s agency to focus more on housing affordability and less on the mortgage fraud accusations the executive director has weaponized against New York Attorney General Letitia James, Sen. Adam Schiff and most recently, Federal Reserve governor Lisa Cook.

— Holden Walter-Warner