Activist investor Bill Ackman expressed support for a merger between Fannie Mae and Freddie Mac as President Trump mulls making both of the mortgage securitizing firms public companies.
Ackman, a prominent Trump supporter, argued that merging Fannie and Freddie would help bring down mortgage rates and “enable them to achieve huge synergies” in their efforts to support the U.S. home loan market.
“A merger would also reduce the cost and risks of government oversight,” Ackman continued in a post on a social media.
Ackman’s post featured a screenshot of a Truth Social post from Trump, which included a doctored image of the president at the New York Stock Exchange. The image appeared to depict the initial public offering (IPO) of “The Great American Mortgage Corporation,” listed with the stock ticker “MAGA.”
“I suspect that this is Trump’s as implied by his post below. It’s a really good one,” Ackman said.
Ackman’s post comes as Trump considers a plan to release Fannie and Freddie from government control and offer them up on the stock market as public companies.
Fannie and Freddie purchase U.S. home loans and either hold them or package them into investment products known as mortgage-backed securities. The process is intended to give U.S. mortgage lenders more money to support the home loan market while creating relatively safe investment products to fuel the housing market.
Both have been under the ownership of the Treasury Department and the supervision of the Federal Housing Finance Agency (FHFA) since September 2008, when the companies suffered billions of losses amid the collapse of the housing market.
Trump sought to release Fannie and Freddie from government conservatorship during his first term, but the COVID-19 pandemic and recession derailed plans to do so before the end of his administration. Democratic lawmakers have been skeptical of plans to cut Fannie and Freddie loose, citing their importance to the U.S. mortgage market and near collapse during the crisis.
