President Donald Trump is looking to make mortgages great again. As homeowners and buyers face continued uncertainty, the president is now floating the idea of a major change to the mortgage market. Trump this week suggested he is giving "very serious consideration" to taking government-backed lenders Fannie Mae and Freddie Mac public. In a post on Truth Social, Trump noted Fannie and Freddie "are doing very well, throwing off a lot of CASH, and the time would seem to be right."
Fannie Mae and Freddie Mac are for-profit corporations with private shareholders, but have been under a federal government conservatorship since they were bailed out during the financial collapse of 2008. Trump's move would free them from that conservatorship and allow them to operate as standalone lenders. Texas realtor Cliff Freeman with the Freeman Group believes Trump should tread carefully since Fannie and Freddie serve as an important backstop in the market. "We have the most sophisticated mortgage industry and availability in the world (in the U.S.), and it's because of the secondary market, which is what Fannie and Freddie primarily support," says Freeman.
Freeman warns that removing the guaranteed government backing from Fannie and Freddie could cause a rise in interest rates. But any impact it would have on the overall market he calls "the $64,000 question."
"This is not something that would really impact my decision to buy or sell a house at this point," he tells KTRH. "I think there are other things that will take precedence, such as consumer sentiment, to get a sense for where the market is going."
Photo: Getty Images North America