Bill Pulte, confirmed by the US Senate to lead the Federal Housing Finance Agency, says he’s in no rush to privatize Fannie Mae and Freddie Mac. The two mortgage giants power over half of America’s mortgages. Pulte told CNN that exiting conservatorship needs to prioritize safety and soundness, as well as how it would affect mortgage rates.
The US housing market faces challenges including elevated borrowing rates, a supply shortage, and near-record high home prices. Experts warn that privatizing Fannie and Freddie could make it more expensive for Americans to borrow money to purchase a home.
Pulte, whose grandfather founded PulteGroup, says privatization is not the Trump administration’s top priority this time around. He emphasizes the need for significant study on what privatization might do to mortgage rates.
Fannie and Freddie were brought under government control after the 2008 housing crisis to stabilize the market. They don’t directly issue mortgages but buy and repackage them for investors, helping to provide a reliable flow of money. Privatization risks spooking investors without guarantees of government backing in case of another crisis like in 2008.
The US government’s stake in Fannie and Freddie is worth billions of dollars, with the companies’ combined net worth being $147 billion as of the third quarter of 2024. Pulte will focus on rooting out fraud, ensuring efficiency, and strengthening safety and soundness within reason.
Source: https://finance.yahoo.com/news/privatizing-fannie-freddie-not-top-005945286.html