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Here’s what privatization of Fannie Mae, Freddie Mac may mean for your mortgage

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2 years ago

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People walk by a sign for Freddie Mac headquarters on July 14, 2008 in McLean, Virginia. AFP Photo/Paul J. Richards (Photo credit should read PAUL J. RICHARDS/AFP via Getty Images)

Paul J. Richards | Afp | Getty Images

Fannie Mae and Freddie Mac — the two giant mortgage finance firms controlled by the federal government for nearly 17 years — could be sold off into the private sector.

During President Donald Trump’s first term, the White House attempted to release the Federal National Mortgage Association, known as Fannie Mae, and the Federal Home Loan Mortgage Corporation, known as Freddie Mac, into the private market. It didn’t materialize because of the complexity, according to experts.

While Trump hasn’t talked about the idea to sell off the government’s shares into the private market, the topic is bubbling up now in Trump’s second term. It could lead to higher mortgage rates and risk for investors, experts warn.

In January, the Federal Housing Finance Agency and the Treasury Department agreed to amend the senior preferred stock purchase agreements between the Treasury and  and Fannie Mae and Freddie Mac, each government-sponsored enterprises, to ensure their eventual release from conservatorship.

What problem are we trying to fix?

Mark Zandi

chief economist at Moody’s Analytics

Experts are torn about how the release of the GSEs will be handled, when it will happen and if the government will continue to somewhat oversee the mortgage giants after-the-fact.

Ultimately, the release from the government-backing for Fannie Mae and Freddie Mac’s will come down to what Trump prioritizes during his second term. And even then, there could be drawbacks, experts say.

“It really ultimately depends on what President Trump wants to do or not do,” said Mark Zandi, chief economist at Moody’s Analytics.

“Even then though, I think they’ll be repelled from actually getting it done because the economics will become apparent that this makes no sense,” Zandi added.

Here’s what to know. 

What the release could mean for homebuyers, investors

The potential impact will depend on the extent of the government’s support after Fannie Mae and Freddie Mac are released, according to Andy Winkler, director of housing and infrastructure projects at the Bipartisan Policy Center. 

The Trump administration’s ability to navigate logistical, legal and economic hurdles will also be a factor, experts say. 

But “a lot could go wrong,” said Susan Wachter, professor of real estate and professor of finance at The Wharton School of the University of Pennsylvania.

If not done well, mortgage rates could potentially climb higher, experts say. Zandi believes “it’s just a question of how much higher” rates would be.

It’s not something you can do with one signature on one agreement.

Susan Wachter

professor of real estate and professor of finance at The Wharton School of the University of Pennsylvania

If you invest in mortgage-backed securities or in Fannie Mae or Freddie Mac’s secured debt, the end of the conservatorship could bring on more risk, Zandi said.

“Therefore you will demand a higher interest rate to compensate for that risk, and therefore mortgage rates will be higher as well,” Zandi said.

Of course, higher rates means higher borrowing costs for mortgages.

While more people bought their homes in all-cash payments in 2024, most Americans still rely on mortgages to buy properties. 

According to a report by the National Association of Realtors, about 26% of homebuyers in the U.S. paid all-cash in 2024, a new high for the segment. To compare, the last record increase was 22% in 2022, up 9% from 2021, per data provided to CNBC.

However, roughly 74% of buyers financed their home purchase in 2024, NAR found. That’s down from 80% a year prior.

In Zandi’s view, any release scenario could affect all parties involved – except potentially Fannie and Freddie shareholders.

“They’re going to make money on the shares they own … That’s why they’re pushing for it,” he said.

Why Fannie Mae and Freddie Mac are essential

Fannie Mae and Freddie Mac buy existing home loans from mortgage lenders. The companies either keep or sell the loans as mortgage-backed securities to investors, creating a system where mortgage lenders have enough capital to continue offering loans.

“The 30-year fixed rate mortgage might not exist without them,” said Bipartisan Policy Center’s Winkler.

The two companies support around 70% of the mortgage market and remain vital to the housing system in the U.S., according to NAR.

The two were created by Congress in order to make homeownership accessible and make the 30-year fixed rate mortgage “the bread and butter” of the U.S., Zandi said.

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Fannie Mae and Freddie Mac have been under a conservatorship with the FHFA since 2008, after the mortgage giants nearly collapsed during the financial crisis. The agreement was done to help the two government-sponsored enterprises recover from the housing market crash.

The Department of the Treasury has financially supported the two companies through senior preferred stock purchase agreements, or SPSPAs, helping them remain solvent.

The mortgages that were being created leading up to the financial crisis were complex, risky, and untraced, Wachter said. The risk was able to build up overtime. 

To be sure, such risky loans were coming from the private sector’s private label mortgage-backed securities, she said. When the market imploded, causing trillions of dollars worth of lending to evaporate within a year, the GSEs were caught in the crossfires.

“The private-label mortgage-backed securities, risky loans, brought on the crisis, but every mortgage player was hit,” Wachter said.

With Fannie and Freddie being the two largest mortgage institutions, the government intervened and bailed the enterprises in 2008 to avoid further damage to the housing market.

Fannie and Freddie became explicitly backed by the government and steps were taken to de-risk them as well as limit the exposure to taxpayers under the conservatorship, Winkler said. 

Under government control, the GSEs don’t operate as fully private companies: they have limited ability to retain profits, strict oversight and a primary goal to maintain the housing market stable over maximizing profits, he said. 

What are the odds of the conservatorship ending? 

While Trump himself has yet to mention the conservatorship, others are talking about it.

Scott Turner, the new secretary of Housing and Urban Development, mentioned in an interview published on Feb. 5 with the Wall Street Journal that making the effort to release Fannie and Freddie would be a priority.

Pershing Square CEO Bill Ackman posted on X in December that “a successful emergence from Fannie and Freddie should generate $300 billion of additional profits to the government” while removing about $8 trillion of liabilities from the government’s balance sheet.

Bill Ackman on X: Expect Trump Administration to remove Fannie Mae, Freddie Mac from conservatorship

Even if the administration prioritizes the conservatorship, the process itself could take years to complete, experts say. 

“It’s not something you can do with one signature on one agreement,” Wachter said. The process involves multiple parties, including the Treasury, the Department of Justice, FHFA and shareholders in the private sector.

However, if “based on the economics of it all, there should be no chance that they get released administratively,” Zandi said. “It doesn’t make any economic sense.” 

“A release is a lose-lose for taxpayers, homebuyers, the housing market, the economy, everybody is worse off than the status quo.” Zandi said. “What problem are we trying to fix?” 

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$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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6 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Personal Finance

Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

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2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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