White House Proposes Privatizing Fannie And Freddie

Molly Prince | Politics Reporter

The Trump administration proposed on Thursday an end to the conservatorship of Fannie Mae and Freddie Mac, which would move the government-sponsored enterprises (GSE) into the private sector.

As part of a sweeping overhaul of the federal government proposed by the White House, the Reform Federal Role in Mortgage Finance section of the report calls to transition Fannie and Freddie into fully private entities.

The changes aim to “ensure more transparency and accountability to taxpayers, and to minimize the risk of taxpayer-funded bailouts, while maintaining responsible and sustainable support for homeowners.” (RELATED: Freddie Mac Narrowly Dodges Another Taxpayer Bailout)

Both Freddie and Fannie have been under conservatorship since 2008, and removing their federal charters would bring about more competition in the market, reported Bloomberg. The White House proposal would allow the agencies and competitors to have an explicit guarantee on mortgage-backed securities that are “only exposed in limited, exigent circumstances” and would be “on-budget and fully paid-for.”

The suggested GSE overhaul resembles draft legislation that was previously written by Republican Sen. Bob Corker of Tennessee in late 2017, which was designed to gain bipartisan support, according to The Washington Examiner.

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Tags : fannie mae freddie mac white house
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