awarding it warrants on the GSEs’ common equity for about 80% of the shares of each enterprise. This means that were conservatorship to end, the government would still effectively have 80% voting control of both Fannie and Freddie. Selling those positions to fully unwind government control would not be straightforward. Given the size of the positions, which is estimated to be more than 8x the largest IPO ever done, selling the shares could take several years to complete. Additionally, increased capital requirements could lead to higher guarantee fees from the agencies, potentially resulting in an unpopular upward pressure on mortgage rates. According to some estimates, the resultant increase in mortgage rates could be close to a full percentage point. Analysts also believe an explicit government guarantee, akin to what they currently have under conservatorship, would likely still be necessary to ensure mortgage-backed securities remain attractive to investors. The future path of the GSEs is undoubtedly uncertain, but this will be an important issue for investors to watch as the new administration implements policy priorities, especially given the potential consequences on the mortgage market and the implications on homeowner affordability. Andrea F. Pringle Financial Strategist & MBS Analyst The Baker Group Andrea is a financial strategist and MBS analyst at The Baker Group. She began her career in Washington, D.C., working on the capital markets sales & trading desk at Fannie Mae for five years before returning to Oklahoma to work in corporate finance. Today, her work focuses on mortgage products. The Baker Group is a Preferred Service Provider of the Indiana Bankers Association and an IBA Diamond Associate Member. MARCH/APRIL 2025 45 Experience & Expertise You Can Trust Banc Consulting Partners is a leader in designing, implementing, and administering BOLI and non-qualified benefit programs for bank officers and directors. With decades of experience, we provide tailored solutions that align with your strategic goals while ensuring regulatory compliance. EXPERIENCE & EXPERTISE YOU CAN TRUST Banc Consulting Partners is a leader in designing, implementing, and administering BOLI and non-qualified benefit programs for bank officers and directors. With decades of experience, we provide tailored solutions that align with your strategic goals while ensuring regulatory compliance. Managing the web of complex issues and regulatory constraints that surround banking today has never been more challenging. So the deep expertise of our banking team has never been more vital. Make life easier. Call us today. New Albany 812.945.2311 Louisville 502.423.0311 monroeshine.com CERTIFIED PUBLIC ACCOUNTANTS Audit & Assurance BSA & ACH Compliance Outsourced Internal Audit SEC & SOX Compliance Loan Review IT Risk Management Consulting Services Merger & Acquisition
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