A group of former Trump administration officials are reportedly putting together a new plan to end the 16-year federal conservatorship of the government-sponsored enterprises (GSEs) Fannie Mae (OTCQB: FNMA) and Freddie Mac (OTCQB: FMCC).
The Wall Street Journal, sourcing its coverage from unnamed “people familiar with the matter,” reported discussions on GSE reform have been going on since the spring and are focused on privatizing the GSEs. A top focus from the discussions involves whether Fannie Mae and Freddie Mac will be sufficiently capitalized so they can function outside of conservatorship and not create a new risk to the housing market.
Among the people involved in these plans are Larry Kudlow, former director of the National Economic Council, and John McEntee, former director of the White House presidential personnel office. Former President Donald Trump is not part of these discussions and has not presented GSE reform proposals in his ongoing presidential campaign.
Fannie Mae and Freddie Mac purchased nearly 40% of the $435 billion of residential loans originated in the second quarter of this year, and they either owned or guaranteed roughly 40% of the $2.2 trillion in multifamily mortgage debt as of September 2023.
I thought Fannie & Freddy bought more debt than the article states, but the Mortgage meltdown descended from too much government interference, so I think it would be a good idea start thinking about less government involvement.
Au contraire. Wall Street wanted in the mortgage securitization game. By table-funding Subprime and Alt-A lenders, and then purchasing their closed loans, Wall Street investment banks went from 0% market share to 50% market share, in just 15 years… perhaps the greatest market share grab in history, in any industry. Wall Street *took* this market share from Fannie / Freddie and put FHA on life support. Or are you suggesting that Barney Frank’s “home ownership” policy pushed business to Wall Street not FHA, Fannie or Freddie?
Mic drop
Another case of the corporate greed structure trying to get in on making money and as usual screwing the public, because private capital firms then sucks the money out of profit making entities, then sends it to stock holders and then companies that were viable become bankrupt. Like Red Lobster chain. Capitalism as an economic system is a great thing, but when private greed steps up, the public usually gets screwed.
There must be ‘balance and oversight’; the question is who is to decide just what ‘balance’ is and who will do the oversight?
Anytime Larry Kudlow’s name is attached to anything the one thing you can count on is that it only benefits Corporate greed in some way!!
He is never a friend of the regular guy!