FHFA director Pulte and President Trump want the government to maintain some oversight over the GSEs – a welcome development for borrowers, one expert says
A potential release of Fannie Mae and Freddie Mac into the public has become a major talking point under the second Trump presidency – and the question of whether the US government will maintain its guarantee over the mortgage giants could be an important one for mortgage borrowers and homebuyers.
At the Federal Housing Finance Agency (FHFA), which oversees the government-sponsored enterprises, director Bill Pulte has said he sees no scenario in which President Trump cedes full control of Fannie and Freddie.
That would mean some form of government guarantee over both entities would continue – an important acknowledgement because it could have a significant impact on the landscape facing mortgage borrowers.
Marty Green (pictured top), principal at mortgage law firm Polunsky Beitel Green, told Mortgage Professional America releasing Fannie and Freddie into the wild with no guarantees would be a risky move.
If conservatorship ended without caveats, “the conventional wisdom is that interest rates for most people would go up,” Green said. “Right now, Fannie and Freddie provide liquidity in the marketplace and one of the reasons they’re able to do that is because the mortgages that they securitize used to have an implicit guarantee but under conservatorship that became more explicit.
“If that was to go away, the thought is that investors in those securities would require more in terms of a return, and so the interest rates on underlying mortgages would have to go up to compensate.”
While he’s mooted an end to conservatorship in its current form, Trump has also emphasized that he would continue to exert plenty of influence over both GSEs.
“I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the US Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President,” he wrote on Truth Social last week.
Signals suggest the Trump administration may keep a strong oversight role over Fannie Mae and Freddie Mac, even exploring a public offering while still in conservatorship, to generate revenue for the US budget. https://t.co/r36WVJ4jmm
— Mortgage Professional America Magazine (@MPAMagazineUS) June 4, 2025
Talk of maintaining guarantee likely a positive sign for markets
Green said those references to maintaining a degree of government control over Fannie and Freddie were likely designed to soothe market nerves over what releasing both entities from conservatorship might entail.
“I think that mostly was probably just a recognition that with interest rates already elevated, the political reality right now is that anything that would make rates go up further was probably not a positive outcome for American consumers,” he said, “and so recognition of that was [acknowledging] we should probably have an implicit guarantee, at a minimum.
“And the cost of that implicit guarantee is not that great, ultimately, and it’s offset by the value that every consumer gets when they originate a loan in the US where they get that lower rate.”
Moving Fannie, Freddie public could be a drawn-out process
While Trump appears keen to push ahead with bringing Fannie and Freddie public, a prominent roadblock could be the likely timeline for that move.
The GSEs have been under government conservatorship for around 17 years, since the global financial meltdown of 2007-08, and ending that arrangement could be easier said than done.
“At the end of the day, there’s going to be some recognition that getting them out of conservatorship too quickly without having thought things through or some unintended consequence may not be the best path,” Green said.
“I think they will do it with deliberate speed, but probably with not too much of a sense of urgency that could cause them to have some missteps.”
Those Trump-Pulte comments mark a departure from the approach pursued during Trump’s first presidency, when officials sought to minimize the role played by the government in the GSEs’ operation.
“Until two weeks ago, we thought Trump would pick up where he left off,” Him Parrott, former housing policy adviser to President Obama, told Bloomberg. But a potential plan to maintain wide oversight would be a “dramatic shift in focus”, he said.
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