President Donald Trump stated Thursday he had ordered “my representatives” to buy $200 billion in mortgage bonds in an try to drive down curiosity rates and month-to-month funds, writing in a Truth Social publish.
Fannie Mae and Freddie Mac, two government-owned mortgage giants, at the moment are value “an absolute fortune” and have sufficient money to fund the directive, he wrote in the publish.
“Because I chose not to sell Fannie Mae and Freddie Mac in my First Term… it is now worth many times that amount — AN ABSOLUTE FORTUNE — and has $200 BILLION DOLLARS IN CASH. Because of this, I am instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS,” he wrote.
“This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable.”
Traditionally, the Federal Reserve has been the most important purchaser of mortgage-backed securities. During the pandemic, the central financial institution purchased lots of billion of {dollars} value of the securities, which helped contribute to the ultra-low mortgage rates many Americans have been in a position to lock in throughout these years.
Generally, when the Fed or one other entity purchases extra mortgage-backed securities, specifically mortgage bonds, it lowers the curiosity rates charged on mortgages.
Trump has been weighing an IPO of Fannie and Freddie for years, together with in his first time period. NCS reported in August that Trump and his financial advisors are planning a sale of inventory of the 2 entities.
This is a creating story and will likely be up to date.