Freddie Mac and Fannie Mae have been in the spotlight throughout the year for several reasons, beginning with the departure of former CEO Diana Reid as William Pulte took charge of U.S. Federal Housing.
- On Tuesday, Freddie Mac named Kenny Smith as the new CEO, who will immediately take on the role on Wednesday.
- Smith takes the reins from Michael Hutchins, who served as interim CEO and will continue in his role as president.
- In a post on X in October, Pulte said that Freddie Mac and Fannie Mae IPO’s could happen as early as the end of 2025.
The housing market has not performed well in the last few years, and chatter about it is not because demand has rebounded, but rather because of the most anticipated public offering this year of the two major government-sponsored enterprises (GSEs) — Fannie Mae and Freddie Mac.
These two enterprises keep the mortgage market in the United States on its toes, ensuring that housing financing is more affordable and funding is made available.
And the chatter around Freddie Mac has not been just about an initial public offering, but about who will lead the firm during this crucial time of opening the company to the world. On Tuesday, Freddie Mac named Kenny Smith as the new CEO, who will take on the role on Wednesday.
Who Is Kenny Smith?
Smith has nearly 40 years of experience in the financial services sector, providing strategy, operational, risk management, and governance counsel to a diverse array of companies and institutions.
He spent 27 years at Deloitte Consulting LLP, including five years as Vice Chairman, U.S. Financial Services Industry Leader. At Deloitte, he also served as the Global Lead Client Service Partner for Wells Fargo from 2008 to 2019, in which role he served as a management advisor on a wide variety of company matters.
Smith takes the reins from Michael Hutchins, who served as interim CEO and will continue in his role as president following the new CEO taking the helm.
Diana Reid’s Departure
Last year in September, Freddie Mac named Diana Reid, a veteran in the real estate and financial services industry, to be the company’s chief executive officer. The appointment came during the Biden administration.
However, she left in March this year following an order by the Federal Housing Finance Agency under William Pulte. Pulte was sworn in as the 5th Director of U.S. Federal Housing, following his nomination by U.S. President Donald Trump.
In this role, Pulte oversees Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. The removal of Reid as CEO was part of an overhaul of leadership at Pulte, which also removed 14 board members from Freddie Mac and Fannie Mae.
Long-Awaited IPO Of Freddie Mac And Fannie Mae
In a post on X in October, Pulte said that Trump made the right decision not to take Freddie and Fannie public during his first term and is “opportunistically evaluating an offering this time around.”
He added that IPO could happen as early as the end of 2025. Shares of Freddie Mac and Fannie Mae, which are traded over the counter, have soared more than 200% so far this year following news of the public offerings.
In May, Trump wrote on Truth Social that he was working to take these two companies public. “…but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President," Trump said in the post.
In a separate post in October, Pulte noted that, combined, Freddie and Fannie have over $7 trillion of assets on their balance sheets. “We are focused on running them like a business and taking out costs, so I don’t think there’s any limit to what they could be worth one day,” he said.
Mortgage Market Currently
In the United States, the mortgage market has suffered mainly due to elevated interest rates and affordability challenges that have led to fewer home buyers and, in turn, fewer mortgage applicants.
Many homebuilding companies, including Lennar, have cited lower demand, prompting them to offer sales incentives to attract customers. But tighter household budgets in an economy currently burdened with tariffs, price hikes, and a weak job market have pushed newer home buyers out of the picture.
What Is Retail Thinking?
Retail sentiment on Freddie Mac’s over-the-counter stock, FMCC, has dipped to ‘bearish’ from ‘bullish’ territory a week ago, with message volumes at ‘normal’ levels, according to data from Stocktwits.
While sentiment on Fannie Mae’s over-the-counter stock, FNMA, has also changed to ‘bearish’ from ‘neutral’ a week ago, with message volumes at ‘normal’ levels.
Shares of FMCC have gained 216% this year, and FNMA stock has jumped over 230% year-to-date.
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