Major investors warned the Trump administration that when it privatizes Fannie Mae and Freddie Mac, the U.S. government must guarantee the $5 trillion in mortgage-backed securities issued by the firms. The Trump administration says its time the government reduced its roll in the housing market and is willing to move ahead without a guarantee.
According to Isaac Boltansky of Compass Point Research and Trading, “The guarantee itself means not only deeper, more liquid markets but also cheaper borrowing costs for consumers.”