Business

U.S. unveils plan to privatize mortgage finance firms Fannie Mae and Freddie Mac

AP

The Trump administration has unveiled its plan for ending government control of Fannie Mae and Freddie Mac.

Those are the two giant mortgage finance companies that nearly collapsed in the financial crisis 11 years ago and were bailed out by taxpayers at a total cost of $187 billion.

The administration’s plan calls for returning Fannie and Freddie to private ownership and reducing risk to taxpayers. That while preserving homebuyers’ access to 30-year, fixed-rate mortgages, a pillar of housing finance. The Treasury Department published the plan Thursday and submitted it to President Donald Trump, who called for it in March.

While not prominently in the public eye, the two companies perform a critical role in the housing market. Together they guarantee roughly half of the $10 trillion U.S. home loan market.