Senate Democrats Warn Trump Plans Fannie, Freddie IPO Could Raise Mortgage Rates

Senators Elizabeth Warren, Cory Booker, and Chuck Schumer are urging the Trump administration to pause the plan to reprivatize and take Fannie Mae and Freddie Mac public, citing concerns that removing the government safety net could lead to higher mortgage rates. The senators highlight that investors may demand higher returns without government backing, potentially raising borrowing costs and making housing less affordable. This concern is echoed by a recent survey indicating that most Americans, especially Democrats and independents, worry that privatization could increase mortgage rates. The administration plans to sell shares of the mortgage giants by the end of the year, with an anticipated IPO that could raise about $30 billion, but previous attempts at privatization have stalled. Federal Housing Finance Agency Director Bill Pulte has pushed back against the senators' letter, blaming prior administrations for unaffordable housing and emphasizing efforts to combat mortgage fraud. The debate underscores the tension between fostering competition and safeguarding affordable lending amid persistent high mortgage rates.