Trump moving to ‘monetize’ Freddie and Fannie, retain control
Privatization of the GSEs may be imminent — though FHFA Director Pulte said they could remain in conservatorships. He also touched on fraud, FICO and the Fed.
Key points:
- President Donald Trump said this week that a plan to take Fannie Mae and Freddie Mac public is in the works, though he still intends to oversee them.
- The announcement received pushback from Democrats, with Sen. Chuck Schumer warning it could “upend middle-class Americans.”
- William Pulte praised the plan, but the FHFA director separately demanded action on interest rates from Fed Chair Jerome Powell and questioned FICO cost increases.
After months of speculation about the future of Fannie Mae and Freddie Mac, the debate appeared to reach a turning point this week as President Donald Trump said privatization of the GSEs is in progress. While Federal Housing Finance Agency Director William Pulte applauded the announcement, it received swift pushback from Democratic leadership.
Pulte also praised Fannie Mae's new mortgage fraud detection platform but spoke out against FICO and the Fed, while the MBA removed DEI language from its website.
A new era for Fannie and Freddie?
It will be, according to Trump — though the president did not offer a specific timeline.
After saying last week that he was "giving very serious consideration" to taking the GSEs public, Trump shared an update on May 27.
"Our great Mortgage Agencies, Fannie Mae and Freddie Mac, provide a vital service to our Nation by helping hardworking Americans reach the American Dream — Home Ownership," his Truth Social post said. "I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President."
During a May 28 interview with CNBC, Pulte said there is a possibility that the GSEs will remain in conservatorships. Fannie and Freddie have been under federal control since 2008.
Trump "is essentially the conservator, and it works well now," Pulte said. "But ultimately, it will be up to the president how and when he wants to — if he even wants to — monetize the asset."
Senate Democratic Leader Chuck Schumer voiced opposition to privatization, saying in a statement to The Hill that the proposal "is yet another economic policy that will upend middle-class Americans looking to buy or refinance a home while helping line the pockets of the wealthy."
Fannie Mae to use AI for fraud detection
Meanwhile, Fannie Mae has launched a new AI-driven mortgage fraud detection and prevention platform in partnership with Palantir that aims to "save the U.S. housing market millions in future fraud losses," according to a May 28 press release.
The technology will allow the enterprise to "look across millions of datasets to detect patterns that were previously undetectable," said Priscilla Almodovar, Fannie Mae's president and CEO.
Pulte, who chairs the Fannie and Freddie boards of directors, said the new Crime Detection Unit platform "will increase safety and soundness by rooting out bad actors in our housing system."
Pulte to Powell: 'Lower interest rates, now'
Pulte has also weighed in on the cost of credit reports and high interest rates over the past few days.
Last week, he called attention to FICO specifically on X, writing that he was "extremely disappointed to hear about the costs increases by FICO onto American consumers." FICO stock declined after Pulte's comments, which he followed with a subsequent tweet that asked, "Why do some credit reports cost double (Biden's term) from what they did during President Trump's first term?"
Pulte has also urged Federal Reserve Chair Jerome Powell to make a move on interest rates. The Fed left rates unchanged during its May 7 meeting, with Powell telling reporters that he "couldn't confidently say" when the time would be right for a rate cut.
But Pulte suggested the housing market "would be in much better shape" if a rate cut occurred. "Jay Powell needs to lower interest rates — enough is enough," Pulte wrote in a May 26 post on X. "President Trump has crushed Biden's inflation, and there is no reason not to lower rates."
Pulte echoed his call for lower rates the following day, writing, "To help reverse the damage Biden's inflation did on the mortgage market, Jerome Powell should lower interest rates, now."
While Trump has also repeatedly called for lower rates, Powell has said that the White House's demands do not impact the Fed's decisions.
MBA deletes DEI language
The Mortgage Bankers Association has removed some diversity, equity and inclusion language from its website, becoming the latest organization to do so following a rollback of DEI policy initiated by the White House. MBA's DEI playbook was among the webpages removed, according to National Mortgage News.
The DEI content was taken down following a review initiated to ensure MBA was compliant with executive orders Trump signed earlier this year, the trade group told National Mortgage News.