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4mo ago

Trump Seeks to End Conservatorship of Fannie Mae and Freddie Mac

Critics warn that maintaining implicit government backing with privatization will drive up mortgage rates, exposing taxpayers to fresh risks.

A man walks through a plaza at the new Fannie Mae headquarters in Washington, U.S., October 4, 2022. REUTERS/Kevin Lamarque/File Photo
U.S. President Donald Trump delivers remarks at the annual National Memorial Day Observance in the Memorial Amphitheater at Arlington National Cemetery in Arlington, Virginia, U.S., May 26, 2025. REUTERS/Ken Cedeno
The sun sets behind the Fannie Mae headquarters in Washington. One of the chief concerns of taking Fannie Mae and Freddie Mac private is how it would influence mortgage rates and could increase their costs. (J. DAVID AKE/AP FILE)
Fannie Mae headquarters, as seen in 2008. Photo: Karen Bleier/AFP via Getty Images)

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.