Trump said to be planning IPO of Fannie, Freddie
The Trump administration is reportedly in talks to sell stock in Fannie Mae and Freddie Mac, the country’s largest mortgage institutions, by the end of the year, according to the Wall Street Journal. The offering could pay $30 billion to the government.
Fannie Mae and Freddie Mac are government-sponsored enterprises, overseen by the Federal Housing Finance Agency, that purchase mortgages from lenders. They then guarantee those mortgages by essentially insuring the loan and promising on-time payments, regardless of whether the homeowner makes the payments or defers on a loan. The two entities play a critical role in the security of the mortgage market and rates. They have been under federal conservatorship since 2008.
The Journal reported that the plan for an initial public offering would sell between 5% and 15% of Fannie and Freddie stock. While both Fannie and Freddie are public, their shares are owned primarily by the federal government.
Valuations for the reported offering were said to start at $500 billion, according to the Journal, and it’s unclear whether Fannie and Freddie would be doing individual offerings. Selling that stock could infuse $30 billion into the government, the Journal said.
The Journal noted that six bank CEOs recently traveled to Washington, D.C., to discuss approaches for the public offering. Questions remain on whether or not the FHFA, headed by Bill Pulte, would keep the conservatorship and maintain the same backing of mortgages.
Wildfires threaten California
Thousands of residents surrounding Los Angeles County have been ordered to evacuate due to two ongoing fires.
The Canyon Fire began Thursday at about 1:30 p.m. in Ventura County, right outside Santa Clarita, California, which is about 33 miles north of Los Angeles.
More than 4,300 residents have been called to evacuate the areas near Lake Piru and the unincorporated community of Val Verde as the fire moves east, while 12,000 residents are under evacuation warnings.
Nearly 5,000 acres have burned, according to the California Department of Forestry and Fire Protection.
The Gifford Fire began Aug. 1 and has grown to exceed 99,000 acres, making it the state’s largest wildfire this year. The January wildfires, Eaton and Palisades, that destroyed thousands of homes and racked up $30 billion in damages burned about 37,000 acres.
The Gifford Fire began in and persists in the Los Padres National Forest in Santa Barbara County. Evacuation orders are in place for that county and San Luis Obispo County.
