Trump Floats Privatizing Notorious Mortgage Giants That Helped Fuel 2008 Implosion

President Donald Trump said on Wednesday he is “giving very serious consideration” to privatizing Fannie Mae and Freddie Mac, two government-sponsored enterprises that play a central role in America’s mortgage market.

Over 15 years have passed since the U.S. government bailed out and took over Fannie Mae and Freddie Mac during the 2008 financial crisis that the two entities helped create. Today, the two enterprises back more than 60% of new mortgages, putting taxpayers at risk for potentially massive losses in the event of another housing crisis.

“I am giving very serious consideration to bringing Fannie Mae and Freddie Mac public. I will be speaking with Treasury Secretary Scott Bessent, Secretary of Commerce Howard Lutnick, and the Director of the Federal Housing Finance Agency, William Pulte, among others,” Trump posted to Truth Social on Wednesday night, adding that he “will be making a decision in the near future. Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right.”

After nearly collapsing in 2008 due to exposure to high-risk subprime loans, the two firms were bailed out by the government and placed under a conservatorship, costing taxpayers hundreds of billions, according to the Congressional Budget Office. While the move was initially intended to be temporary, they have remained under federal through the present day.Fannie Mae was created in 1938 as part of the New Deal and later privatized in 1968, while Freddie Mac was chartered by Congress in 1970 as a private company. Both entities purchase mortgages from lenders and bundle them into securities sold to investors with a government-backed guarantee, intended to mitigate investor risk.Trump pushed to overhaul the entities during his first term, but efforts were stalled due to logistical challenges and the onset of the COVID-19 pandemic.While details of any potential privatization plan are unclear, skeptics caution it could destabilize the housing market and increase mortgage rates. On the other hand, advocates for privatization have argued that doing so would boost private sector competition and reduce taxpayers’ exposure.“A successful emergence of Fannie and Freddie from conservatorship should generate more than $300 billion of additional profits to the Federal government … while removing ~$8 trillion of liabilities from our government’s balance sheet,” Trump ally and billionaire hedge-fund manager Bill Ackman