WASHINGTON -- President Donald Trump's federal housing finance director, Bill Pulte, quietly granted government-backed lenders the authority to nearly double a $200 billion bond purchase that Trump ordered to try to lower mortgage rates, a move that could introduce a new level of risk for the companies.An email obtained by The Associated Press that was sent by the Federal Housing Finance Agency to top officials at Fannie Mae and Freddie Mac eliminated caps that prohibited the lenders from each holding more than $40 billion in mortgage bonds.The Jan.
12 email says that “effective immediately” the new amount of mortgage bonds that they could hold in their portfolios was raised to $225 billion apiece.If the mortgage buyers were to act on the full extent of this new authority, that would amount to a roughly $170 billion increase in bond purchases over what the president instructed them to buy.Neither Pulte nor the FHFA addressed questions about whether Trump or Treasury Secretary Scott Bessent was consulted before the increase was enacted.The changes to the purchasing rules effectively reverse nearly two decades of bipartisan consensus that limits should be imposed after the government had to bail out Fannie Mae and Freddie Mac in the aftermath of the financial crisis of 2008-09, which led to both being placed into a government conservatorship.
Before this story was published, Pulte took to X, calling it “fake news.”“FHFA simply gave each entity legal flexibility to go beyond their previous caps,” Pulte wrote Friday, adding that despite the lenders' new bond purchasing authority, they would not “exceed $200 billion.” The White House, the Treasury Department, Fannie Mae and Freddie Mac did not respond to requests for comment.Some members of Congress who were closely involved in the fallout from the financial crisis have raised concerns about Pulte and the Republican administration's new approach.They say any benefit from the mortgage bond purchase will...