Bill Ackman backed calls to end Fannie Mae (OTC:FNMA) and Freddie Mac (OTC:FMCC)conservatorship amid warning that the administration could face significant political consequences if it delays decisions.
In an X post on Wednesday, Ackman responded in agreement with “True” to a user named CaliRefugee1, who urged swift conservatorship exit, warning that delay leaves their trillion-dollar cash-generating capacity, which he called a “massive war chest,” as a potential asset for Democrats if they regain power in 2028.
He argued that moving quickly is necessary to prevent what the Trump administration describes as “waste, fraud, and abuse.”
Bessent Signals Fannie-Freddie Plan for 2027-28
On Tuesday, Treasury Secretary Scott Bessent’s remarked on 2WAY’s “The Morning Meeting” that the Trump administration expects to be “tackling” the companies’ ownership structure in 2027 or 2028. Bessent said, “Whatever we do is going to be guided by making sure that the spread on mortgages, on agency mortgages over the Treasury does not increase.”
Notably, Fannie Mae and Freddie Mac have remained under government conservatorship since the 2008 financial crisis.
Ackman Challenges Treasury’s Fannie-Freddie Deal
In March, Bill Ackman criticized the U.S. Treasury’s handling of Fannie Mae and Freddie Mac, arguing that the 2012 Net Worth Sweep diverted the mortgage companies’ quarterly profits to the government despite their having repaid the bailout. He said shareholders are seeking enforcement of the original senior preferred stock agreement, not a government handout.
Ackman contrasted the terms imposed on Fannie and Freddie with those offered to banks during the 2008 financial crisis. He said Treasury provided the mortgage firms with $193 billion in senior preferred stock at a 10% coupon, plus commitment fees and warrants for 79.9% ownership in each company. According to Ackman, the companies have since paid Treasury $301 billion, including repayment of the principal and $25 billion more than the original contract required. He has called freeing the firms from government conservatorship his top investment idea for 2026, arguing that it could generate substantial taxpayer returns.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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