Fannie Mae, Freddie Mac: Trump “Gives very serious considerations” to turn off mortgage giants

Cnn
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President Donald Trump said on Wednesday that he soon planned to decide whether Fannie Mae and Freddie Mac, who are sponsored by the government to help to offer stability and affordability on the American mortgage market.

“I am very serious that Fannie Mae and Freddie Mac on Wednesday on his social media website, Truth Social, on his social media website that he would advise with cabinet members and” would make a decision in the near future “.

“Fannie Mae and Freddie Mac do it very well and throw a lot of money off, and the time seems to be right,” said the post.

At a time when the mortgage interest rates persisted and real estate prices continue to increase, some economists have warned that attempts to privatize fannie and Freddie could disturb the remaining amount at the mortgage market, which makes it even more expensive for Americans to buy money for buying a house.

Many of Trump's allies in the Republican Party have long campaigned for the end of the government Conservatories under which fannie and Freddie were housed in the global financial crisis in 2008 after their role. The state control of the two companies should be temporary.

In fact, Trump tried and failed in 2019 during his first administration, Fannie and Freddie from the US government.

Fannie and Freddie essentially grease the bikes of the American credit market by buying mortgages from lenders and re -packing them for investors. This enables a reliable money current and enables mortgers to offer potential buyers more affordable mortgage interests.

Many experts prepare the two companies to support the 30-year-old festival mortgage, the most popular type of housing loan in the USA due to its relatively low monthly payments compared to short-term loans.

Before 2008, Fannie and Freddie were private companies that were supported by the US Finance Ministry – although both were originally created by the government. They were accommodated on September 7, 2008 under state control after they had tackled massive losses because the home values ​​that ignited the great recession. A week later, the Lehman brothers collapsed and triggered a global financial crisis.

The privatization of Fannie and Freddie could be the investors who buy mortgage loans and cause them to demand a higher return for their investments and increase mortgage interest.

Mark Zandi, chief economist at Moody's Analytics, estimated in 2024 that privatization could cost the typical American who took a new mortgage between 1,800 and 2,800 US dollars a year.

Fannie and Freddie are currently checked by the Federal Housing Finance Agency (FHFA), which has been conducted by William Pult since its confirmation in March. At this point, Pulte said that every effort, Fannie and Freddie privatized, would have to include “significant studies” to the efforts of the mortgage interest.

It can take a few years. In a reference to customers on Wednesday, the analyst of TD Cowen Financial Services and Housing Policy, Jaret Seiberg, said that he had not expected the Trump administration to try out a spin-off by the end of 2026 or early 2027.