Senate Democrats are trying to get Housing Secretary Scott Turner to explain his support for reprivatizing Fannie Mae and Freddie Mac — and how such a change would impact homebuyers.
In a letter obtained by NOTUS, ranking member of the Senate Banking, Housing, and Urban Affairs Committee Elizabeth Warren and Minority Leader Chuck Schumer asked Turner to clarify what role the Department of Housing and Urban Development would play in the process — the Federal Housing Finance Agency is the firms’ regulator, and the Treasury Department holds most of its common stock.
“Reprivatization of Fannie Mae and Freddie Mac threatens to raise the cost of mortgages and rent and make it even harder to access credit for purchasing a home. At a time when so many Americans are struggling with housing costs, we must ask why you are choosing as one of your first priorities a policy that only makes it harder for Americans to afford housing,” the senators wrote.
Signed by nearly a dozen Democrats, the letter goes on to ask who Turner plans to include in privatization conversations, and asks what role he intends to play in the process considering “HUD does not play a direct role in oversight of Fannie Mae and Freddie Mac.”
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“If you help lead the process to end the conservatorships of Fannie Mae and Freddie Mac, do you commit to ensuring that any changes do not raise mortgage costs or make it more difficult to access mortgage credit for American homebuyers?” the letter added.
HUD did not immediately respond to a request for comment.
Turner said soon after becoming secretary that he would take a key role in the discussions about privatizing Fannie Mae and Freddie Mac.
“There are partners that will be at the table and obviously we’ll be one of them,” Turner said in an interview with The Wall Street Journal on his first day in office. “When you’re a quarterback, you’ve got to work with the entire huddle.”
Fannie Mae, the Federal National Mortgage Association, and Freddie Mac, the Federal Home Loan Mortgage Corporation, are major players in the mortgage-backed securities market. They were bailed out by the federal government during the 2008 financial crisis; the move to place them under government conservatorship brought stability to the housing market.
The Trump administration has long been interested in the idea of privatizing Fannie Mae and Freddie Mac, and The Wall Street Journal reported that some Trump allies started discussing plans to do it before President Donald Trump won the 2024 election.
Treasury Secretary Scott Bessent said in written answers to the Senate during his nomination process that actions on privatizing them “should be carefully designed and executed.” But he also said that “no conservatorship should be indefinite.”
In the letter, the Senate Democrats urged caution.
“If mismanaged, ending the conservatorships and Treasury’s role with Fannie Mae and Freddie Mac could make mortgages more expensive, cut off access to mortgage credit, destroy many of the important reforms made over the past 16 years, and compromise our entire housing market,” reads the letter.
The letter comes just a day before the committee hears from Trump’s nominee to lead the FHFA, Bill Pulte.
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Amelia Benavides-Colón is a NOTUS reporter and an Allbritton Journalism Institute fellow.
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