Trump Allies Explore Plans to Privatize Fannie Mae and Freddie Mac
Allies of former U.S. President Donald Trump are reportedly discussing strategies to privatize the mortgage-finance giants Fannie Mae and Freddie Mac should Trump secure a victory in the upcoming election, according to a Wall Street Journal report published on Thursday.
The discussions, involving key Trump confidants such as former National Economic Council director Larry Kudlow and former White House presidential personnel office director John McEntee, focus on removing U.S. government control over these entities. The plan could potentially include measures for the Treasury Department to provide partial backing for some Fannie Mae and Freddie Mac loans through a "standby guarantee," the Journal reported.
Privatization efforts could involve circumventing traditional congressional approval processes by working directly through the Federal Housing Finance Agency (FHFA) and the Treasury Department, as per the report. This approach aims to bypass legislative hurdles that have historically stymied attempts to privatize these firms.
Fannie Mae and Freddie Mac, both established by Congress, function as for-profit corporations with private shareholders. Their core mission is to enhance the national home lending market by purchasing home loans from private lenders and converting them into mortgage-backed securities.
Previous attempts to privatize these government-controlled entities, including those during Trump’s previous administration, have been unsuccessful. Both Fannie Mae and Freddie Mac continue to operate under government conservatorship, a status that has persisted since the financial crisis of 2008.
As of now, neither the Trump campaign nor the entities involved have responded to requests for comment on the report.
