Scott Turner, head of the Department of Housing and Urban Development, laid out key priorities, including a push to improve efficiency and privatize Fannie Mae and Freddie Mac. Turner also aims to ease regulations affecting housing costs, expand development on federal land and continue work focused on opportunity zones, according to the Wall Street Journal. Fannie Mae and Freddie Mac have long been the government’s safety net for loans, but for the last 17 years, they have required a safety net of their own. According to Reuters, the new government plans to privatize Fannie Mae and Freddie Mac, which are estimated to be worth hundreds of billions of dollars. The Wall Street Journal anticipates this would allow bankers to sell over $100 billion worth of shares at once, creating the biggest stock and bond offerings in history and attracting sovereign-wealth funds. “The conservatorship was always intended to be temporary, so it makes sense that policymakers release them from conservatorship now that reforms are complete,” a spokesman for billionaire John Paulson — a Trump backer and hedge fund manager who owns a sizable share of Fannie and Freddie shares — said in a statement to The Journal.
According to Inside Mortgage Finance (as per the Wall Street Journal), about 40% of the $435 billion of residential loans originated in the second quarter of 2024 were sold to Fannie or Freddie, not including multifamily mortgage debt of which 40% is $2.2 trillion. “A successful emergence of Fannie and Freddie from conservatorship should generate more than $300 billion of additional profits to the Federal government (this is on top of the $301 billion of cash distributions already paid to the Treasury) while removing ~$8 trillion of liabilities from our government’s balance sheet.”
The bottom line is that privatization is long overdue regardless of the hikes in mortgage rates. Fact of the matter is that 71% of Realtors sold no homes, last year. When it comes to HUD itself, fact of the matter is that there is going to be massive changes. FHA is really what we generally call HUD work orders, other than those on the M&M post-conveyance side. Where the rubber is going to meet the road is when the profit margins of the National Order Mills are juxtaposed with what Labor is being paid, there is going to be a realization by the Trump Administration that fraud, waste, and abuse has been the daily mantra. In conjunction with the IAFST’s NAICS Petition being submitted Monday on Regulations.gov, the business-as-usual theft from Labor will soon be addressed.
