The Wall Street Journal, June 25, 2019: Push to overhaul Fannie, Freddie nudges up mortgage costs
Investor anxiety about a Trump administration push to overhaul housing finance is showing up in prices in the market for mortgage-backed securities.
Securities issued by mortgage giants Fannie Mae and Freddie Mac are trading at a growing discount compared with securities sold by Ginnie Mae, another government agency that backs mortgages, bond data show. That has led to higher borrowing costs for plain vanilla mortgages.
The market for Fannie and Freddie’s securities is the world’s second largest behind Treasurys. Investor demand for the securities is strong because the companies are currently backstopped by the U.S. government. The companies are central to the popular 30-year mortgage, which locks in steady payments for buyers.
