Only Congress can privatize Fannie and Freddie, but the Administration's government reorganization plan is looking to do just that. Pensions & Investments reports:

A private Fannie Mae and Freddie Mac would impact investors' real estate portfolios — but to what degree depends on what the Trump administration means by "private," industry insiders say.

The idea of privatizing the Federal National Mortgage Associationand Federal Home Loan Mortgage Corp. bubbled to the surface in June as part of a reorganization plan for the federal government proposed by the Office of Management and Budget. Few details were provided as to how Fannie Mae and Freddie Mac would go private, but the plan suggests lifting the U.S. conservatorship of the two entities, in place since 2008, but keeping a limited federal backstop or guarantee.

Under the plan, mortgage-backed securities issued by Fannie Mae, Freddie Mac and their competitors would have a federal guarantee only "in limited, exigent circumstances," the OMB plan states. Only Congress can privatize Fannie Mae and Freddie Mac, and no bills have been introduced that would do so.

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