Fannie Mae, Freddie Mac shares rise after federal agencies reveal privatization path Reuters
By Niket Nishant and Manya Saini
(Reuters) – Stocks Fannie Mae (OTC:) i Freddie Mac ( OTC: ), the mortgage giants under U.S. government control since 2008, rose to multi-year highs on Friday after federal agencies unveiled a framework for their “orderly” release from oversight.
The U.S. Treasury Department and the Federal Housing Finance Agency (FHFA) said Thursday that they have amended their agreements with the companies to ensure their eventual exit from oversight is not disruptive.
The agencies would also seek public comment before any of the so-called “government-sponsored enterprises” are freed from federal control, they said.
The exit from oversight would mark a key milestone for Fannie and Freddie, which were created by Congress to support the housing market by providing affordable mortgage financing, but collapsed after being hit hard during the 2008 financial crisis.
They were bailed out with taxpayer funds, and the Treasury Department in return received preferred stock that paid out billions of dollars in dividends over the years.
Since then, efforts to bring them back under private control have continued, including during the first administration of President Donald Trump.
The latest update comes just weeks before Trump is set to take office for a second term.
“Treasury will consult with the President before agreeing to release the GSEs from supervision,” the statement said.
Earlier this week, billionaire Bill Ackman said he expects the new administration to remove the GSE from oversight.
Analysts also expressed similar sentiments. “We think GSE privatization could be on the agenda during the second Trump administration,” KBW wrote in a November note.
Fannie shares were last up 24.4% at $4.23, hitting their highest since 2017. Freddie Mac climbed 23.2% at $4.15, hitting levels not seen in more than eight years.
