Why Shares of Fannie Mae and Freddie Mac Are Rising Today

Despite a brutal market sell-off, with the Dow Jones Industrial Average down more than 600 points as of 12:18 p.m. ET, shares of the government-sponsored entities (GSEs) are up nicely today. Shares of both Fannie Mae (OTC: FNMA) and Freddie Mac (OTC: FMCC) traded about 9% higher for potentially a few reasons.

First, Fannie and Freddie recently announced that they will soon begin guaranteeing homes of nearly $1 million in some parts of the country.

But I think the bigger news driving the move today has to do with the unveiling of a letter sent by former President Donald Trump to Sen. Rand Paul earlier this month. In the letter, Trump says if he had had the authority to do so at the time, he would have removed Federal Housing Finance Agency (FHFA) Director Mel Watt at the beginning of his presidency and ordered the release of Fannie and Freddie from government conservatorship. The FHFA regulates Fannie and Freddie.

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Source Fool.com