The Trump administration is exploring an executive order that could pave the way for privatizing Fannie Mae and Freddie Mac, The Wall Street Journal reported on Sunday, citing sources familiar with the matter.
The potential plan would instruct federal agencies to evaluate the idea, which supporters argue could reduce the federal deficit and return value to taxpayers.
Federal Housing Finance Agency Director William Pulte, who recently took over, has already made sweeping changes. In his first week, Pulte removed over a dozen board members at the two mortgage giants, appointed himself chairman and brought in new directors — one of whom, Elon Musk associate Christopher Stanley, resigned a day later. FHFA staff and executives, including Freddie Mac Chief Executive Diana Reid, were also dismissed or placed on leave.
Pulte posted on X that there’s “a lot of upward mobility” for remaining employees. However, insiders say the shake-up has caused concern within the mortgage industry, especially given the scale and sensitivity of the multitrillion-dollar mortgage market.
Trump allies are also considering a bold plan to transfer the government’s stake in Fannie and Freddie — estimated at more than $250 billion — to a proposed sovereign wealth fund. Treasury Secretary Scott Bessent hinted at the possibility in a recent podcast.
Critics warn that privatization, if mishandled, could raise mortgage rates by pushing investors to demand higher returns. Pulte and Bessent say any plan would account for such risks.
While Moody’s economist Mark Zandi sees no immediate danger, he cautioned that an economic downturn could test the new leadership’s ability to manage the system under pressure, the Journal reported.
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