Senators ask FHFA to pause plans to privatize Fannie, Freddie

A group of Democratic senators, including Elizabeth Warren and Chuck Schumer, asked the director of the Federal Housing Finance Agency to pause any efforts to privatize mortgage finance companies Fannie Mae and Freddie Mac.

President Donald Trump said on social media last month that he's considering a public stock offering for the two government-backed enterprises, triggering speculation that the administration could seek to end government ownership of the two companies. FHFA director William Pulte has confirmed the administration is studying ways to carry out a public offering for the companies. 

READ MORE: FHFA's Pulte defers to a higher authority on conservatorship

In a letter sent Thursday, 14 senators asked Pulte, whose agency regulates Fannie Mae and Freddie Mac, to wait on any moves until he has briefed Congress. The letter says that a rushed process could push mortgage rates higher and benefit wealthy investors at the expense of ordinary homeowners. 

"Hasty and poorly planned changes to the Enterprises could dramatically increase costs for families seeking to purchase a home, rewarding President Trump's billionaire campaign contributors while making the housing crisis even worse," the senators wrote. 

The FHFA did not respond to a request for comment. 

The US government seized Fannie Mae and Freddie Mac in 2008 as the mortgage market imploded, putting the companies under a form of government control known as conservatorship. The two companies guarantee trillions of dollars of US mortgages, for houses and apartment buildings.

Prominent investor and Trump ally Bill Ackman has advocated on social media for an end to government conservatorship as part of a plan that involves public stock offerings for Fannie and Freddie. Critics say the plan would result in Ackman reaping enormous gains from his own Fannie Mae and Freddie holdings and potentially lead to higher mortgage rates. 

There is no public evidence that Trump or Pulte are pursuing Ackman's plan and members of the administration have given signs they may look at pursuing a public offering in a way that wouldn't fully privatize the companies. In their letter, the senators asked Pulte if he had met with Ackman or any other hedge funds that own significant shares in Fannie and Freddie. 

Pulte as well as Treasury Secretary Scott Bessent have each said that while plans are preliminary, the government will not do anything that risks pushing mortgage rates higher. Mortgage rates are near their highest level in decades, and administration officials have signaled concern that the rising cost of homeownership will damage Trump's popularity.