By Agencies
The Trump administration is set on launching initial public offerings (IPOs) for mortgage finance giants Fannie Mae and Freddie Mac later this year, according to a report from the Wall Street Journal on Friday.
Discussions surrounding this initiative suggest that the companies could be valued at around $500 billion or more combined, potentially generating $30 billion for the administration, as noted by sources familiar with the situation.
Fannie Mae and Freddie Mac did not respond immediately to requests for comment from Reuters.
These companies have been under federal conservatorship since 2008, a consequence of the financial crisis that left them insolvent due to the subprime mortgage collapse.
Emerging from conservatorship would represent a significant achievement for these entities, which were established by Congress to bolster the housing market by providing affordable mortgage financing. Their stability was severely compromised during the financial downturn, leading to a taxpayer-funded bailout and resulting in the Treasury acquiring preferred shares that have generated billions in dividends over the years.
Efforts to restore them to private control have persisted, including initiatives during Trump’s first term. Earlier this week, Trump also met with the CEOs of Citigroup and Bank of America to discuss the administration’s plans for privatizing the mortgage firms, as reported by Reuters.
Meanwhile, shares of Fannie Mae, which trade over-the-counter, saw a 20% increase.
