Democrats call for halt of Fannie Mae, Freddie Mac privatization

Senate Democrats led by Sen. Elizabeth Warren (Mass.), the ranking member of the Banking Committee, called on the Trump administration to halt the reprivatization of Fannie Mae and Freddie Mac, which finance 70 percent of the nation’s mortgage market and entered federal conservatorship after the 2008 financial crisis.

“We have serious concerns that you plan to make significant changes to the enterprises in a way that would put investor profits over the homes of millions of Americans. Should President Trump make good on his plans, he may take us back to the status quo before the 2008 foreclosure crisis,” Warren and other Democratic senators wrote in a letter to William Pulte, the director of the Federal Housing Financing Administration (FHFA).

Senate Democratic Leader Chuck Schumer (N.Y.) and Democrats on the Senate Banking Committee also signed the letter.

They asked Pulte and his staff to “halt any plans to reprivatize the enterprises until you have adequately assessed the potential impact of y our plans on the housing market.”

They warned that neither the federal housing administration nor the administration have produced a study of what impact releasing Fannie and Freddie from government conservatorship would have on mortgage rates and the housing market more broadly.

The Democratic pushback was prompted by President Trump’s post on social media last month that he is working on “TAKING THESE AMAZING COMPANIES PUBLIC,” referring to the two special purpose entities.

Democrats said they want Pulte to explain what factors influenced Trump’s social media posts and what has changed since the FHFA director told lawmakers recently that the privatization of Fannie and Freddie was not a top priority.

Warren and her colleagues asked Pulte to provide a list of any meetings he’s had about privatization since his Senate confirmation in March and to name the agencies, departments and White House officials that have been involved in discussions about privatization.

“Despite your statutory role as regulator and conservator of the enterprises, you recently stated that President Trump will ‘eventually make whatever decision that he wants to make, on his own timeline.’ It is incredibly concerning that you appear to be conceding your responsibility to ensure the safety and soundness of the enterprises to advance the president’s political agenda,” they wrote.

They asked Pulte to provide answers to their questions by June 18.

The other Democratic signatories included Sens. Catherine Cortez Masto (Nev.), Tina Smith (Minn.), Ruben Gallego (Ariz.), Ron Wyden (Ore.), Andy Kim (N.J.), Mazie Hirono (Hawaii), Chris Van Hollen (Md.), Gary Peters (Mich.), Lisa Blunt Rochester (Del.) and Mark Warner (Va.).

Sen. Bernie Sanders (I-Vt.) also signed the letter.