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Investing.com-- President Donald Trump’s Federal Housing Finance Agency head Willian Pulte is undertaking a leadership overhaul and is seeking changes at federal mortgage majors Fannie Mae and Freddie Mac (OTC:FMCC).
Pulte ousted more than a dozen board members at the two, the Wall Street Journal reported, and has appointed himself chairman of the two along with a host of new directors.
Trump’s administration is also seeking to privatize the Federal National Mortgage Association (OTC:FNMA), known colloquially as Fannie Mae, and the Federal Home Loan Mortgage Corporation, known as Freddie Mac.
The two were formed by Congress in the last century to help expand the secondary mortgage market through mortgage-backed securities. Both sell prepackaged mortgages with a government guarantee of protection against losses.
Pulte has seen sweeping personnel changes at the two, having recently fired Freddie Mac CEO Diana Reid.
Beyond privatization, Trump was also seen looking at a proposal to transfer the Treasury’s ownership of the two to a sovereign wealth fund proposed by Trump.
Fannie Mae and Freddie Mac came under direct government control following the 2008 financial crisis- a bulk of which was caused by subprime mortgage-backed securities.
Privatizing the two could create a major windfall for the government, and aid Trump’s agenda of slashing the budget deficit.