Trump Considers Taking Fannie Mae, Freddie Mac Public, Calls Mortgage Giants 'Very Profitable,' Says Timing Seems Right

The mortgage giants, which underpin approximately half of the U.S. residential mortgage market, have generated substantial cash flows since their 2008 conservatorship, according to Reuters. Both companies operate as for-profit corporations with private shareholders, purchasing home loans from private lenders and repackaging them as mortgage-backed securities.

See Also: Snowflake Q1 Earnings: Revenue, EPS Beat Estimates, AI Data Cloud Company Sees 25% Growth Ahead, Shares Climb

Why It Matters: Fannie Mae and Freddie Mac were placed under Federal Housing Finance Agency conservatorship during the 2008 financial crisis after suffering overwhelming losses from the housing market collapse. The government intervention prevented catastrophic economic effects but maintained federal control over the entities.

FHFA Director Bill Pulte recently fired Freddie Mac CEO Diana Reid and placed senior FHFA officials on administrative leave. Pulte also dismissed 14 board members from both companies and appointed himself chairman of both entities.

Billionaire investor Bill Ackman of Pershing Square Capital Management has recommended both companies as investments, stating in December that he expects them to exit conservatorship under the Trump administration. “Trump likes big deals and this would be the biggest deal in history,” Ackman wrote.

Image Via Shutterstock

Read Next:

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.