Donald Trump, “The biggest deals of history” can be and the stakes could not be higher.
For a folk bag, it can bring a lot of billions of dollars for hundreds of billion dollars and households. Or mortgage rates can be increased.
The transaction is the fate of two mortgage giant Freddie Mac and Fannie Mae Freddie Mac and Fannie Mac and Fannie Mac and Fannie Mae, which are $ 7 trillion worth $ 12 trillion (5.2 trillion pounds).
The best mortgage prices
Money is managed by.com – Yahoo can win a commission from the above links.
Over the past 17 years, they are in government protection, that is, the Federal apartment is managed by the Finance Agency (FHFA), managed by a government guarantee behind their loans.
Now the president wants to start cashing.
“I give a very serious idea to take the community of Fannie Mae and Freddie,” Trump wrote to Social Social on May 21.
“Fannie Mae and Freddie Mac works very well, throws a lot of money and the time looks correct. Get up!”
The two GSE are worth about $ 161 billion. Selling part of these shares, $ 25.6 billion in Saudi Aramco (IPO) as the largest list of history can do $ 25.6bn Saudi Aramco (IPO).
But there are great potential problems.
It is not clear what trade will be traded in GSES and the owners of private investors in GSES and private investors covering the support. The bargain has a risk on the threats on financial stability and is a risk that mortgage can be higher.
In early June, a group of 14 Democratic Senators headed by Elizabeth Warren, the warning of the FHFA Director William Pulte, the result may be “catastrophic”.
Fannie and Freddie are very big. Among them, the United States supports approximately 70pcs of the mortgage market. “They came back in 2007, it was a big part of the market, now they are almost completely intact” says Jim Parrott, City Institute
Gses operate from banks by purchasing mortgage loans. Absorbs the mortgage to trust and slice them to give a mortgage-supported securities (MBS), a bond similar investment tool. These are then sold to insurers and pension funds.
Fannie and Freddie give a fee by providing debt. This is one of the fields of the American financial system.
There is a very good reason to the end of the conservatives that need to be a temporary crisis size.
A large business party in the Brookings organization, Aaron Klein, the opening of GSS to private equity, provides the government’s risk-inverse loan terms and for the first time the mortgage debt for buyers.
At the same time, Messing will risk the risk of infection throughout the financial sector.
One of the most important questions, what happened with the government’s guarantee – $ 250 billion – if the GSES conservatory is allocated.
Analysts warned the government guarantee, and can add a percentage to mortgage rates. This would be more than 7.7 in a 30-year adjustment for a 23-year height of 2023, in 2023.
President Mike Calhoun, President of the Center for Living Loans, “It is important to do this (exit) at the right time, and this is not the time.”
The management is wary of risks. Scott Bessent, Treasury Secretary, said he would affect the “most important metric” mortgage rates in February.
On May 27, he said: “I want to be clear, the US government will keep its secret guarantees and remain strong in our position in control as a president.”
But the “intended” guarantee is not the same as the open guarantee in place.
“The secret guarantee is not enough,” says an investment banker. “The market can create all kinds of variations to have this backstop and remove it.”
Without an open government guarantee, Freddie and Fannie will have a credit risk attached to Mortgage-supported securities, Libby Canrill, the head of the PIBBY policy, one of the largest participants in the MBS market agency.
This will restrict the mortgage-supported securities who can buy. If you have less investors, they will require a higher price, which means higher costs for homebuyers.
Analysts claim that open warranty can remain in place without much risk of taxpayer. Freddie and Fannie’s credit books are in good condition. Goldman says Sachs analysts, “remote” of need to draw on the warranty.
However, a clear guarantee will require the establishment of an action in order to take place.
A route of the president, probably research, in fact, does not end.
According to the CNBC, “In fact, we learn to engage in conservators and the public and attract public,” he said.
This can solve the issue of warranty, but there would be no coverage to expand mortgage lending.
Another great question for the taxpayer, the Treasury decided to treat Fannie and Freddie’s other shareholders.
Trump’s initial truths, Freddie Mac and Fannie Mae’s shares in the 21st May 21 – It is available as a large number of shares – 42pc and 50.6pc.
Markets, GSES is betting from the command, Trump’s Billionaire Hedge Foundation, Back Bill Ackman, who has a high-level lawyer of plans, will issue huge development gains for special shareholders.
“Trump likes great deals and would be the biggest deals of this history. I am sure that,” said Ackman said last year.
Another billionaire, Ally, John Paulson was also an investor in Fannie and Freddie.
However, a shareholder would mean trading.
In connection with the crisis, the Treasury, Fannie and Freddie have received a large stock – there is a $ 348 billion claim.
It is also in the field of 79.9pc from the total share. In other words, Fannie and Freddie government are more than a double value worth $ 161 billion, and the treasury claims are primarily in other private shareholders.
Therefore, there are expectations to write some allegations of some claims of the treasury that the contract is better to work in favor of private shareholders, the president’s friends.
“If you do the right jobs, you can win for taxpayers and can really help millions of American mortgage loans,” Klen said.
“If you make a mistake, there may be a mass loot. Hundreds of billion billion dollars from taxpayers and premium hedge funds and alcohol funds and spire
As a result, no one knows what the president will do. Parrott says: “It is not very important, where we are all the headline.”
