Trump vs Fannie Mae and Freddy Mac


Fanny Mae and Freddy Mac are the nicknames for two mortgage giants that back about 70% of U.S. mortgages and have been under government conservatorship since the 2008 financial crisis. 

“Fannie Mae and Freddie Mac don’t issue mortgages directly. They purchase loans from lenders and package them into securities sold to investors. This process ensures a steady flow of capital to mortgage markets and supports affordable loan rates.

 

“Privatizing these companies could disrupt this system. Investors might view mortgage-backed securities as riskier without explicit government guarantees, leading to higher borrowing costs.”

 

A possible compromise would be to charge the companies a fee for government guarantees in times of crisis. Such a measure could mitigate risks while maintaining some level of market stability.

On the evidence, I’d say that the goal for the Trump Administration is chaos, not stability. Here’s hoping there are enough adults in the room to prevent that.

https://www.mpamag.com/us/mortgage-industry/market-updates/will-trump-push-for-plans-to-privatize-fannie-mae-freddie-mac/516264

 

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