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U.S. President Donald Trump said on Tuesday that the U.S. government will retain its mortgage guarantees and oversight role for Fannie Mae and Freddie Mac as he works to take the U.S. mortgage finance firms public. "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," Trump said in a post on Truth Social.
I recommend junior preferred shares of Fannie Mae and Freddie Mac, as they offer significant upside and anti-dilution protection in any likely restructuring scenario. Common shares appear overvalued, already pricing in a successful recap and release, with little realistic upside based on my valuation models and government analysis. Trump's administration, with aligned FHFA and Treasury leadership, is poised to decide on recap and release within 90 days, making privatization likely this term.
Analysts have said the move could send serious profits toward the government, while also warning it could slam mortgage rates.
Fannie Mae and Freddie Mac have surged on Trump privatization hopes, but common shares may now be overvalued, especially Fannie Mae. The government's senior preferred shares have a liquidity preference, limiting upside for common shareholders if GSEs are recapitalized. Fannie Mae is downgraded to Sell due to stretched valuation; Freddie Mac remains a Hold given more reasonable pricing.
MCLEAN, Va., May 22, 2025 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey ® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 6.86%.
Investors are betting that the Trump administration will remove the companies from government conservatorship.
Trump said he's considering taking Fannie Mae and Freddie Mac public. The move would privatize the mortgage giants, which have been under government control since 2008.
MCLEAN, Va., May 21, 2025 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today announced the pricing of the Freddie Mac Seasoned Loans Structured Transaction Trust (SLST) Series 2025-1, a securitization of approximately $284.2 million including both guaranteed senior and non-guaranteed subordinate securities backed by a pool of seasoned residential mortgage loans. The SLST program is a fundamental part of Freddie Mac's seasoned loan offerings which reduce less-liquid assets in its mortgage-related investments portfolio and shed credit and market risk via economically reasonable transactions.
The average rate on the 30-year fixed mortgage rose this week to 6.81%, according to the latest Freddie Mac data released on Thursday. That is up from last week's reading of 6.76%.
MCLEAN, Va., May 15, 2025 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey ® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 6.81%.