- Trump is in talks with top bank CEOs to explore selling the government’s stakes in Fannie Mae and Freddie Mac.
- The plan could lead to a major IPO, with banks like JPMorgan, Goldman Sachs, and Bank of America likely to benefit.
- Stocks for both mortgage giants jumped after the news, as investors anticipate a return to private ownership.
- Affordable housing groups warn privatization could raise mortgage costs for low-income borrowers.
Trump Courts Wall Street
President Trump has begun private meetings with major bank leaders to discuss ending federal control of Fannie Mae and Freddie Mac, per Bisnow. CEOs from JPMorgan Chase and Goldman Sachs have already met with him, while Bank of America’s CEO is expected to follow.
A Return to Private Hands
The mortgage agencies have been under government conservatorship since the 2008 crisis. Trump has said the government would still guarantee loans even after privatization. A small number of shares already trade publicly, but the government holds the majority.
Big Market Reaction
Following the news, Fannie Mae’s stock rose 15%, and Freddie Mac’s gained 6%. Hedge funds and banks see a major opportunity if the companies go public. The IPO could become one of the largest ever, generating major fees for participating banks.
Risks and Pushback
A recent CBO report said the government would only raise $206B from a sale if it put the firms into receivership. Housing advocates warn that removing safeguards could raise mortgage costs for low-income buyers and renters.
The plan, still in early stages, could reshape the US housing market if it moves forward.
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