The executive order would prevent federal agencies and the government-sponsored enterprises from facilitating the acquisition of a single-family home by a large institutional investor.
President Trump’s announcement that the GSEs will buy $200 billion of agency MBS prompted mortgage spreads to tighten by about 20 basis points and some lenders to offer mortgages below 6.00%.
Treasury Secretary Scott Bessent confirmed industry speculation that President Trump directed the GSEs to purchase $200 billion in MBS to offset Federal Reserve policy.
Fed Chairman Powell said the investigation is a pretext and the real crux is the Fed's refusal to comply with President Trump's calls to lower interest rates.
The president wants Fannie and Freddie to buy $200 billion in agency MBS to lower interest rates and reduce the cost of buying a home. Initial reaction from MBS analysts was mixed.
Don Layton, under whose leadership Freddie rolled out the first CRT transaction in 2012, said cracks in the GSEs’ CRT programs expose them to systemic risks. The cure: a new capital rule.