White House May Sell Shares of Fannie and Freddie

Market Performance - Fannie Mae's shares are up approximately 20% [1] - Freddie Mac's shares are up approximately 22% [1] Company Background and Role - Fannie Mae was chartered in 1938 [2] - Freddie Mac was established in 1970 [2] - Fannie Mae and Freddie Mac purchase mortgages from banks and mortgage lenders, package them into securities, and sell them to investors [3] - These activities provide banks with more balance sheet space for lending and help maintain relatively stable mortgage rates [3] Historical Context and Government Intervention - Fannie Mae played a role in creating the 30-year mortgage [4] - Both entities bought many risky mortgages leading up to the 2008 financial crisis and required government bailouts, leading to conservatorship [4] - Hedge funds acquired Fannie Mae and Freddie Mac shares at very low prices and have held them for 17 years [5] Potential Future Actions - The current administration is reportedly preparing to sell shares in Fannie Mae and Freddie Mac, potentially starting this year [1] - The Trump administration had intentions to bring them out of conservatorship [5]