Fannie-Freddie Escape Plan at Risk of Collapse in Mortgage Chaos
- First-quarter results to preview extent of market mayhem
- Headwinds could complicate Trump’s bid to end U.S. control
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Fannie Mae and Freddie Mac face strong headwinds from the mayhem coronavirus has spread through the mortgage market, complicating the Trump administration’s plans to free them from U.S. control anytime soon.
The companies, which backstop roughly $5 trillion of mortgages, might have to set aside huge amounts of money to cover the risk of souring home loans. They may also take a hit from the pain being inflicted on nonbank mortgage servicers as millions of borrowers delay making their monthly loan payments. Meanwhile, the outlook for the U.S. housing market -- the engine that powers Fannie and Freddie’s profits -- looks bleak.