He told Fox Business News on Wednesday that "we've got to get them out of government control" and added that the incoming Trump administration should be able to restructure Fannie and Freddie "reasonably fast.

Fannie and Freddie buy mortgage loans from lenders. They were created by the government to make it easier for borrowers to get mortgages. They hold some of the loans that they buy in their own portfolios and package others into pools that are sold to investors. Both ran into trouble after the housing bubble burst as more and more borrowers defaulted on their mortgages. But they are still both publicly traded companies that are backed by some prominent investors, many of whom have been clamoring for the government to finally let them go.

Fannie Mae (FNMA) Stock Message Board - InvestorsHub

The hope is that Fannie and Freddie will become truly independent companies that no longer have ties to the government. The national debt is the Republicans' problem now. Washington's relationship with Fannie and Freddie is a bit complicated, though. The government actually doesn't own any of the common shares that trade on Wall Street.

The Treasury Department has warrants that give it the right to a But the government has not exercised those warrants. Mutual fund giant Fidelity has big stakes in the stocks of both companies. Bill Ackman's Pershing Square is the largest investor in Fannie and also has a stake in Freddie.

Fairholme Funds, run by value guru Bruce Berkowitz, owns preferred stakes in both. And many of these investors have been feuding with the feds over their role in the takeover of Fannie and Freddie.

Fairholme sued the government over its takeover of Fannie and Freddie, alleging that Washington improperly seized the two companies' profits.

FNMA Stock Price & News - Fannie Mae - Wall Street Journal

A federal judge ruled last month that the government withheld some of the documents about its takeover. But Mnuchin's comments about privatization could be the biggest victory yet for Fannie and Freddie shareholders. Donald Trump's curious Goldman Sachs connections. What remains to be seen is whether Mnuchin's plan will get past Republican congressional leaders.

Texas GOP Representative Jeb Hensarling, the chair of the House Financial Services Committee, has said on numerous occasions that he wants Fannie and Freddie to eventually be unwound completely.

Unshackling Fannie and Freddie from the government could also put an end to a steady stream of cash that the two have paid the Treasury Department in dividends over the past few years.

Both have payments due in December. So Fannie and Freddie have actually wound up being a profitable investment for taxpayers. Start your day right with the latest news driving global markets, from major stock movers and key economic headlines to important events on the calendar. Daily newsletter, Sunday through Friday. Most stock quote data provided by BATS.

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If You Go Long Fannie and Freddie, You'll Lose | Sure Money Investor

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