The future of housing affordability in America hangs in the balance as policymakers consider privatizing Fannie Mae and Freddie Mac, the government-sponsored enterprises that underpin the $10 trillion mortgage market.
• Fannie Mae and Freddie Mac don't lend directly to homebuyers but purchase mortgages from lenders and package them into securities
• The government took control of these entities during the 2008 financial crisis, but the arrangement was meant to be temporary
• Privatizing these enterprises without proper safeguards could increase mortgage rates by 20-40 basis points, or even a full percentage point without government backing
• Higher mortgage rates would price more Americans out of homeownership and potentially trigger broader economic slowdown
• Possible solutions include explicit government guarantees or a hybrid model where privatized GSEs pay fees for government backing
• The debate represents a fundamental question about the proper role of government in ensuring housing affordability
Think about how important housing is for individuals, families, and the entire economy. The decisions made about Fannie Mae and Freddie Mac will affect all of us in ways we might not expect.

📰 Read more about this topic in our latest article: https://sunrisecapitalgroup.com/treasurys-push-to-privatize-fannie-and-freddie-what-homeowners-need-to-know/

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