00:00Three Democratic senators are asking the Trump administration to pause President Trump's plan of reprivatizing Fannie Mae and Freddie Mac.
00:10In a letter to Federal Housing Finance Agency Director William Pulte Friday, Senators Elizabeth Warren from Massachusetts,
00:18Cory Booker from New Jersey, and Chuck Schumer from New York claim Trump's plan to sell shares of Fannie Mae and Freddie Mac could make mortgage rates go even higher.
00:27For example, some experts have estimated that mortgage rates could increase by up to 1% in the first year of privatization alone, the letter states.
00:36If Fannie Mae and Freddie Mac are privatized and no longer backed by the government, the lawmakers say investors might worry the government won't rescue them in a crisis.
00:46This added risk could lead investors to demand higher returns, which would raise mortgage rates for borrowers.
00:52The senator's letter cites an article by U.S. News titled Mortgages Under Trump, What Happens If He Privatizes Fannie Mae and Freddie Mac?
01:01Published in May, that echoes many of their points.
01:04The same article also offers another perspective.
01:07If Fannie Mae and Freddie Mac become private companies again, it might lead to more new ideas and more companies joining the mortgage market.
01:15This increased competition could help lower mortgage costs for borrowers.
01:19According to The Wall Street Journal, Pulte responded to the senator's letter.
01:23Elizabeth Warren, Jerome Powell and Joe Biden made housing unaffordable these last four years,
01:28and we are doing everything we can to reverse their damage, including removing mortgage fraud, Pulte said in a statement.
01:36For Straight Arrow News, I'm Lauren Keenan.
01:38If you want more on this story, download the Straight Arrow News app or visit san.com.
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