Trump’s Plan for Fannie Mae and Freddie Mac:
If Donald Trump wins the presidential election, Republicans hope he will privatize Fannie Mae and Freddie Mac, currently under government control since the Great Recession. This move aims to enhance competition in the housing finance market and reduce taxpayer risk. However, Democrats and some economists caution that privatization could drive up mortgage rates, making homeownership more expensive.
Economic Impact:
Analysis by economists indicates that a privatized Fannie Mae and Freddie Mac could lead to an increase in mortgage rates, potentially adding $1,200 per year to the cost of a typical American mortgage. While supporters like Mark Calabria argue that the companies are financially stable and ready for privatization by 2027, opponents fear market disruptions and limited access to mortgages for some borrowers without a government guarantee.