Hi folks,
Don't worry about Bessent's statement that „any release of Fannie Mae and Freddie Mac from their current conservatorship would depend on the implications of mortgage rates“.
As Navy said, that comment is irrelevant. I would call it a nothingburger. Why?
As you may have already noticed, almost every article we've read lately on the end of the conservatorship talks about the threat of rising mortgage rates due to the release. Bessent's message takes a stand on this and says that he has this in mind. And that's all.
This statement is actually good for us. Consider that higher capital requirements lead to higher fees for housebuilders, as costs are always passed on to the end consumer. And here we are talking about the cost of capital.
Reforms are not necessary for this either, except for a change in the ERCF, i.e. a lower capital rule - in our favor. 😊 Depending on the kind of change, this can be done quickly.
There are still a few tasks to be mastered before a release, such as the future organization of the G-Fees. But I am convinced that this has all been taken care of in the meantime. Because these are tasks that have been known for a long time. And when I watch Trump go full throttle this time, I have no questions left.
GLTA 😀
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