Prospects and Challenges of GSE Conservatorship Exit Under the Incoming Trump Administration
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The incoming presidential administration of Donald Trump (Trump II) is now developing key policy priorities to implement once it takes office in January. In addition to those needed to fulfill campaign promises, various interest groups are advocating to add to that list, including calls to prioritize having Freddie Mac and Fannie Mae, the two large government-sponsored enterprises (GSEs)[1], exit their 16-year-long conservatorships.
The possibility of a GSE conservatorship exit has sparked considerable media attention, particularly in housing and mortgage industry circles. Separately, Trump II has the ability to directly reshape GSE mortgage policies. Given that the GSEs together finance approximately 50 percent of the near-$13 trillion in first-lien residential mortgages, this can significantly impact millions of current and prospective American homeowners.