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On Monday, shares of Freddie Mac (OTC: OTC:FMCC) and Fannie Mae (OTC: OTC:FNMA (ST:FNMA)) saw an uptick after comments from U.S. Director of Federal Housing Finance Agency (FHFA) Bill Pulte. Pulte emphasized the necessity for the government-sponsored enterprises (GSEs) to operate efficiently and effectively "as businesses", focusing on serving the American public and enhancing the housing market's affordability.
Pulte's remarks indicated a shift towards a more business-oriented approach for the two entities, which have historically been criticized for operational inefficiencies. "For years, Fannie Mae and Freddie Mac have been filled with bloat, excessive spending, and worse - that ends now," Pulte stated. He highlighted that the organizations need to be "run as businesses that serve the American people."
The FHFA director underscored the progress made by Fannie Mae and Freddie Mac, stating they are "stronger than ever before" and will continue to improve. He pointed out that unnecessary expenditures, including wasteful consulting contracts and what he referred to as "DEI nonsense," are being eliminated, allowing the GSEs to focus on making housing more affordable.
Pulte also mentioned that the FHFA has been reducing regulations at an unprecedented rate, which he believes has contributed to making the market "more safe, sound, and affordable." This regulatory rollback is part of the broader efforts to reform the housing finance system, with the goal of creating a more competitive and resilient market.
The market responded positively to these announcements, with both Freddie Mac and Fannie Mae shares moving up from their lows of the day. The shift in focus towards operational efficiency and affordability in the housing market is expected to have a beneficial impact on the performance of these GSEs.
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