Fannie-Freddie Rise After White House Proposes Privatization
- Proposal aims to end companies dominance and spur competition
- Firms and and rivals would have explicit guarantee on MBS
Photographer: Jacob Kepler/Bloomberg
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The Trump administration wants Congress to remove the federal charters for Fannie Mae and Freddie Mac as part of a plan to release the mortgage giants from U.S. control, according to a sweeping proposal for reorganizing the government released Thursday.
The two companies, which have been under U.S. conservatorship since 2008, could have their market dominance challenged by new competitors under the plan. Fannie, Freddie and any rivals would be overseen by a government entity with power to approve guarantors, change regulations and ensure market participants are adequately capitalized, the report said.