Crypto Stocks Are Heating Up

At the center of this transformation is a game-changing platform that's experiencing explosive growth with $41 million in revenue in just nine months. The stock has doubled in the last 45 days, but this is only the beginning.

Allies hope a Trump win changes the system for mortgages. Some warn it will make them pricier

R.J. RICO
October 25, 2024

If Donald Trump wins the presidential election, Republicans hope he will fulfill a longstanding GOP goal of privatizing the mortgage giants Fannie Mae and Freddie Mac, which have been under government control since the Great Recession.

But Democrats and some economists warn that, especially in this time of high mortgage rates, doing so will make buying a home even more expensive.

Republicans contend the Federal Housing Finance Agency has been overseeing the two firms far too long, stymying competition in the housing finance market while putting taxpayers at risk should another bailout be necessary, like in 2008. President Donald Trump sought to free the two companies from government control when he was in office, but Joe Biden's victory in 2020 prevented that from happening.

Democrats fear ending the conservatorship would cause mortgage prices to jump since Fannie Mae and Freddie Mac would need to raise fees to make up for the increased risks they would face without government support. The two firms guarantee roughly half of the $12 trillion U.S. home loan market and are a bedrock of the U.S. economy.

Project 2025, a handbook for the next Republican administration, includes a key call for the conservatorship to end, though Trump has sought to distance himself from the 920-page document, which was drafted by longtime allies and former officials of his administration.

"If his (Donald Trump's) Project 2025 agenda is put into effect, it will add around $1,200 a year to the typical American mortgage," Democratic presidential nominee Kamala Harris said during an August rally in North Carolina, building off of a 2015 analysis by economists Jim Parrott and Mark Zandi.

Parrott, a fellow at the Urban Institute, and Zandi, chief economist for Moody's Analytics, concluded that a privatized Fannie Mae and Freddie Mac "would need to hold more capital against riskier loans ... forcing them to either increase mortgage rates for these borrowers or lend less to them." Ultimately, they found that privatization would cause rates for 30-year mortgages to rise between 0.43% and 0.97%. Applying that to the average homeowner's mortgage balance of $244,500 in 2023, that would be about $730 to $1,670 more per year.

Parrott told The Associated Press he was surprised to see his analysis resurfaced nearly a decade later, but he stands behind it. "Privatization would cause a pretty significant spike in the cost of buying a home for most Americans," said Parrott, who worked on the National Economic Council under then-President Barack Obama.

But to economist Mark Calabria, who headed the FHFA during Trump's presidency, those fears are unfounded and the federal government has what he considers a "statutory mandate" to return the companies to private ownership.

"I didn't find it to be a credible or compelling" argument, Calabria, now a senior adviser at the libertarian Cato Institute, said of Zandi's and Parrott's analysis.

Calabria said Fannie Mae and Freddie Mac are much more financially healthy now and it's "completely doable" to remove them from conservatorship by 2027 once they raise the additional funds needed to strike out on their own.

"I don't think there should be any concerns that suddenly mortgages will become more or less expensive," Calabria said. "If you want to be able to strengthen our mortgage financial system so that we make sure that people are in reasonable, responsible loans and that we don't have to bail out the mortgage finance system again, we need to fix Fannie and Freddie."

Trump hasn't said whether he wants to revisit ending the conservatorship, but in 2021 he lamented to Republican Sen. Rand Paul that his privatization effort had failed.

"My Administration was denied the time it needed to fix this problem," he wrote to the Kentucky senator. The Trump campaign declined to comment Tuesday on whether Trump still wants to end the conservatorship.

Parrott said a key question is whether a privatized Fannie Mae and Freddie Mac would have a guarantee -- either explicit or implicit -- that the government would step in and rescue them if they failed.

How the Trump administration would handle that issue would dictate whether privatization is "only somewhat disruptive or dramatically disruptive," Parrott said.

Before they were taken over in 2008, Fannie Mae and Freddie Mac were private companies but still enjoyed an implicit government guarantee -- one that bailed them out after the collapse of the housing market and the wave of mortgage defaults.

The companies long ago paid back their $187 billion bailouts and have given the government tens of billions more in dividends. But the bailouts enraged Republicans and many are loathe to reinstitute such a guarantee, arguing the government should not be spending billions of dollars in taxpayer money to save mismanaged companies.

Without that guarantee, though, Parrott said there's an "enormous risk that the market will not accept Fannie and Freddie's privatization," throwing the housing finance market into chaos and preventing all but those with "pristine credit" from being able to secure a mortgage -- something Parrott called a "worst-case scenario."

Calabria dismissed those fears and said there's no need for a federal guarantee. Other huge firms the government bailed out during the 2008 recession, including Citibank, AIG and General Motors, remain public companies and haven't needed a conservatorship, he said.

"The same set of law around Citibank exists for Fannie and Freddie -- why are we treating them differently?" Calabria said. "There were implied guarantees behind the auto companies. We bailed out GM. Are people who are against the conservatorship ending also suggesting the government take over GM?"

With interest rates widely expected to continue to fall next year, Parrott believes those leading the Treasury Department under a new Trump presidency would realize the "market reality" that privatizing Fannie Mae and Freddie Mac will cause mortgage rates to bounce right back up.

For that reason, he's skeptical that privatization will happen, even if the failure to go through with the plan would anger Trump allies who hold large shares in the two mortgage giants and stand to get a huge windfall should they be privatized.

"It would be a pretty hard pill to swallow as president that you're going to have to tell homeowners that ... you're going to take steps that will crank the mortgage rate back up to where it was when everybody was in so much pain," Parrott said.

Continue Reading...

Popular

Chanel appoints designer Matthieu Blazy as new artistic director

PARIS (AP) — One of the most prestigious roles in global fashion has just been filled, as appointed Franco-Belgian designer Matthieu Blazy as its new artistic director, the fashion house announced Thursday.

XRP Poised For 'Brief Correction,' But Here's Why It Could Go To $4

With Ripple's regulatory approval to launch its RLUSD stablecoin, anticipation is mounting about the trajectory of XRP (CRYPTO: XRP) prices following the launch.

The REAL "Wealth Wave" in AI is Starting Now! - Ad

If you missed out over the past 12 months... If you are NOT one of the 500,000 new millionaires from AI in the past two years... Are you going to miss your second chance?

Senate begins final push to expand Social Security benefits for millions of people

WASHINGTON (AP) — The Senate is pushing toward a vote on to millions of people, setting up potential passage in the final days of the lame-duck Congress.

Louise Trotter is named creative director of Bottega Veneta, as Matthieu Blazy moves on

MILAN (AP) — Kering announced Thursday that Louise Trotter has been named creative director of the fashion house, taking over from Matthieu Blazy.

What's Going On in This Strange Facility Near Mar-A-Lago? - Ad

Most people have no clue this unassuming facility exists. Yet the minute Donald Trump takes office... This could be the most important building in America. More important than the Capital, the Pentagon... even the White House. Because this may well be the epicenter of Trump's New Manhattan Project.

UK leader Starmer invited to EU meeting in latest sign of post-Brexit thaw

LONDON (AP) — will attend a meeting of leaders early next year, becoming the first U.K. prime minister to do so since the country’s in 2020.

Suspect in UnitedHealthcare CEO killing charged with murder in New York, court records show

ALTOONA, Pa. (AP) — After on a New York sidewalk, police searched for the masked gunman with dogs, drones and scuba divers. Officers used the city's . Investigators analyzed DNA samples, fingerprints and internet addresses. Police went door-to-door looking for witnesses.

This AI Stock Could Lead a $120 Billion Market - Ad

AI stocks are making waves, but the real breakthrough is happening in the $120 billion security robotics market. Autonomous robots are transforming public safety, and one company is ahead of the curve. Timing is everything. Ready to find out more?

A Southwest jet and a small plane wound up on the same runway after being cleared to land

WASHINGTON (AP) — A Southwest Airlines jet wound up on the same runway with a small private plane that had stopped after an air traffic controller cleared both planes to land on the same California runway in October, according to federal investigators.

Commanders hire Campbell's CEO Mark Clouse as their new team president

WASHINGTON (AP) — The hired Mark Clouse as their new team president Tuesday, putting the longtime food executive in charge of all facets of the organization's business operations when he starts in late January.

Wall Street Legend Issues Inauguration Buy Alert - Ad

If you've underperformed this raging bull market, if you've lost money or missed out... this is your final chance to potentially profit.

Friday's Top 5 Trending Stocks: What's Going On With SMCI, Nvidia, MicroStrategy?

SMCI, Nvidia, MicoStrategy, SoFi Technologies and Tesla are the top five trending tickers on Yahoo Finance Friday. Here's a look at what grabbed retail investors' attention as much of Wall Street takes the day off.

Eli Lilly invests $3B to expand Wisconsin factory to help meet demand for Mounjaro, Zepbound

Eli Lilly is spending another $3 billion to bulk up manufacturing as the drugmaker seeks to stoke production of some and future products.

My TOP Altcoin for Right Now Is... - Ad

Searching for the top investment opportunity in crypto? Look no further. Our $3 report gives you the full scoop. You'll get this exciting token's name, our recommended investment strategy, and growth projections. Time is of the essence with this one...

China bans exports to US of gallium, germanium, antimony in response to chip sanctions

BANGKOK (AP) — China announced Tuesday it is banning exports to the United States of gallium, germanium, antimony and other key high-tech materials with potential military applications.

Why Is This Bull Run Scaring JP Morgan, Goldman Sachs, and Warren Buffett? - Ad

Billionaires Warren Buffett, Stanley Druckenmiller, and David Tepper have all sold off massive U.S. stock positions. Billionaire Ray Dalio, who runs one of the world's most successful hedge funds, says, "Things are going to get worse for our economy." What are these billionaires so worried about?

Here's How Ray Dalio Thinks Trump's Second Term Could Reshape the US and the World

Donald Trump's second term as president is expected to bring about a significant shift in the global and domestic order, with Trump's selections for key posts set to aid in this transformation.

Fortnite players 'tricked' into unwanted purchases are starting to get refunds. Here's how to apply

NEW YORK (AP) — U.S. consumers who were “tricked” into purchases they didn't want from Fortnite maker are now starting to receive refund checks, the Federal Trade Commission said this week.

AI Has Already Minted 500,000 New Millionaires in 2 Years... - Ad

If you missed out on the riches from AI the past 12 months, listen up: A brand new AI "wealth wave" is already hitting the markets... and could pay out even more than what we've already seen. There's still time to get into AI as an investor in this "Bot Com Revolution" and avoid getting left behind.

SEC Approves America's First 24-Hour Stock Exchange — What It Means For You

U.S. regulators approved the nation's first 24-hour stock exchange on Wednesday, marking a significant shift in American securities trading as retail investors increasingly demand round-the-clock market access.

Bank of America signs again with FIFA for US-hosted Club World Cup that still has no TV deals

GENEVA (AP) — World Cup sponsor Bank of America teamed with FIFA for a second time Tuesday, signing for the Club World Cup that still has no broadcast deals just over six months before games start.

Did You See Trump's Bombshell Exec. Order 001? - Ad

Biden broke it... Now Trump is going to fix it. Starting with "Exec. Order 001." It's a bombshell law that Trump could sign within minutes of stepping into the Oval Office... And it will instantly set off the most sweeping government technology project in 80 years... The most lucrative, too...

A federal judge temporarily halts the proposed supermarket merger of Kroger and Albertsons

A federal judge has temporarily halted a between supermarket giants Kroger and Albertsons, an action that could scuttle the deal.

Exposed: 3 Cent Crypto to Explode December 16th? - Ad

Chris Rowe, the man who spotted 44 different coins that have returned over 100%, is now making the biggest crypto call of his ENTIRE career.... Because a powerful crypto event will trigger on December 16th... Sending hundreds of tiny cryptos soaring 5X, 50X, even 100X -- in just days.

Jeff Bezos says he is 'optimistic' about a new Trump term and can help with cutting regulations

Amazon founder Jeff Bezos said Wednesday that he is “optimistic” about President-elect Donald Trump’s second term and expressed some excitement about potential regulatory cutbacks in the coming years.

What's Going On With NIO Stock Today?

Nio shares gained 12.4% Monday. Shares of U.S.-listed Chinese traded higher following reports suggesting Chinese officials would embrace a "moderately loose" monetary policy.

10 Billion Humanoid Robots on Planet Earth? - Ad

Maybe growing up, you imagined we'd all have our own personal "robot butler" roving around our home doing what we command. Believe it or not, but that's EXACTLY what will soon happen with this new "Bot Com Revolution." Elon Musk is predicting 10 billion humanoid robots by 2040. Even more amazing, Musk predicts these robots could cost only $20,000 each -- about the cost of a good used car!

He'll be the last meatpacker in the Meatpacking District. Here's how NYC's gritty 'hood got chic

NEW YORK (AP) — When John Jobbagy’s grandfather immigrated from Budapest in 1900, he joined a throng of European butchers chopping up and shipping off meat in a loud, smelly corner of Manhattan that New Yorkers called the Meatpacking District.

Newmont Lays Off Senior Employees Pursuing More Cost Controls

Newmont Corp. lays off senior employees, sells assets, and streamlines business units in order to increase cash flow and focus on top-tier operations.

Do Not Read This If You're an Elon Musk Hater - Ad

Elon Musk believes his new AI product will be worth an incredible $9 trillion. But the mainstream media is not buying it. Fortune called it "all smoke and mirrors" The Economist said that Elon's promises are "long on bombast and short on reality." And MarketWatch called it "a pipe dream."

UPS to pay $45M to US settle charges that it improperly valued its freight division

UPS will pay $45 million to settle charges that it improperly valued its freight division, the Securities and Exchange Commission announced Friday.

Has the Tech Stock Selloff Finally Arrived? - Ad

After soaring over 150% in 2024 alone... is it actually time to buy Nvidia? A 50-year Wall Street veteran gives his answer to Nvidia, right here...Including the name and ticker of one under-the-radar AI stock to buy instead of Nvidia... before Tuesday, December 3rd.

Why Is Telomir Pharmaceuticals Stock Trading Higher On Tuesday?

Telomir Pharmaceuticals unveils preclinical data on Telomir-1, highlighting its potential in Type 2 diabetes, aging, and inflammatory diseases.

What to know about the fatal shooting of the UnitedHealthcare CEO

The chief executive of UnitedHealthcare, one the nation's largest insurers, Wednesday in midtown Manhattan in what police described as a targeted attack by a shooter outside a hotel where the company was holding a conference.

Caught On Camera (Shocking New AI Tech) - Ad

AI has already made 500,000 new millionaires over the past two years... The new AI tech you'll see in this video footage will change your life for the better, sooner than you might expect. It will have a bigger impact than the invention of the automobile, personal computer and iPhone, combined...

Trending Now

Information, charts or examples are for illustration and educational purposes only and not for individualized investment management This message contains commercial elements, such as advertising. We only send these offers to those who have opted in to our newsletter. Past performance is not indicative of future results. For these reasons we strongly suggest trading in a DEMO/Simulated account. The information provided by us is for educational and informational purposes only. We make no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended and have not determined if the statements and opinions of the advertiser are accurate, correct or truthful. If you use, act upon or make decisions in reliance on information contained or any external source linked within it, you do so at your own peril and agree to hold us, our officers, directors, shareholders, affiliates and agents without fault.

Copyright trendadvisor.net
Privacy Policy | Terms of Service