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Investing.com -- Shares of Federal Home Loan Mortgage Corp (OTC:FMCC), commonly known as Freddie Mac , rose 2.4% in OTC trading today, while Federal National Mortgage Association (OTC:FNMA), or Fannie Mae , gained 0.5% following optimistic valuation comments from a top housing official.
U.S. Federal Housing Finance Agency Director William "Bill" Pulte stated in a Fox Business interview that he believes Fannie Mae and Freddie Mac are currently worth between $500-$700 billion, with potential to reach "a trillion and potentially trillions" in the future. These comments appear to have sparked investor interest in the mortgage giants’ over-the-counter stocks.
Pulte also revealed details about a potential initial public offering, noting that if approved, the government would likely sell only about 5% of its stake in the companies. "If the President decides to do it, which will be on his own time frame, you know, we’re in no rush, the President holds all the cards," Pulte said of U.S. President Donald Trump’s role during the interview.
The FHFA Director suggested that any offering would be "very oversubscribed" and could become "the largest IPO in history." He also referenced past considerations to sell the companies for $100-$150 billion, which he indicated would have significantly undervalued the entities based on his current assessment, praising Trump for deciding to keep the two giants.
He also confirmed that the U.S. government would retain a stake in the companies when they IPO, saying, "I think we’re looking at about 5%" of ownership preserved.
Both Fannie Mae and Freddie Mac have been under government conservatorship since the 2008 financial crisis, with their future status remaining a subject of ongoing discussion among policymakers.
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