Fannie Mae, Freddie Mac Up on Effort to Speed Independence

Fannie Mae and Freddie Mac shares leaped after a media report that their oversight agency is trying to speed their escape from government control.
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Shares of Fannie Mae  (FNMA)  and Freddie Mac  (FMCC)  leaped on Friday after a a media report that the mortgage groups' oversight agency is trying to speed their escape from government control.

Knowledgeable sources told the Wall Street Journal that the Federal Housing Finance Agency is making the effort.

Fannie Mae shares recently traded at $2.20, up 18%. They have slumped 30% year to date. Freddie Mac recently traded at $2.16, up 23%. It has slid 28% so far this year. 

The declines have come at the same time that home prices have taken off amid the coronavirus pandemic.

Fannie and Freddie have been under the government’s control since the financial crisis. 

To be sure, the FHFA, led by Mark Calabria, doesn’t yet have the sign-off he needs from Treasury Secretary Steven Mnuchin, the sources said. But both men seek the move, according to The Journal.

In any case, a change is improbable before President Donald Trump leaves office Jan. 20, and President-elect Joe Biden is seen as unlikely to press for the move, according to The Journal.

But Calabria and Mnuchin could make some moves that are difficult to undo, such as significantly restructuring the government’s stakes in Fannie and Freddie, according to The Journal.

Last week, Freddie Mac Chief Executive David Brickman resigned, effective Jan. 8. The company didn’t offer a reason for his departure.

Michael Hutchins, currently Freddie Mac’s executive vice president of investments and capital markets, was named interim president of the company. 

Hutchins, 64, will also continue with his previous responsibilities. The company’s board will soon begin a search for a new CEO.