Overview
- President Trump announced plans to take the mortgage giants out of nearly 17 years of conservatorship and return them to public trading under existing government guarantees.
- Opponents say preserving implicit backstops without structural reform could undermine market discipline and leave taxpayers liable for future bailouts.
- Senate Democratic Leader Chuck Schumer estimated the proposal could hike average annual mortgage costs by $1,800 to $2,800 for American families.
- The Treasury’s $341 billion senior preferred stake and warrants on almost 80% of equity must be monetized and reconciled with an FHFA mandate for $300 billion in capital.
- FHFA Director Bill Pulte stressed that any exit requires a carefully planned recapitalization and regulatory framework to safeguard market stability and prevent upward pressure on rates.