The Trump administration is targeting a $30 billion IPO for the GSEs, potentially valuing them over $500 billion under the Great American Mortgage Corporation. Analysts express skepticism about completing this process by the year's end, with Bose George from KBW suggesting it is unlikely due to necessary capital considerations. Wells Fargo analysts gauge a 40% likelihood for the IPO, citing significant challenges ahead. The primary concern for the mortgage sector is maintaining some level of government guarantees to support market stability and keep mortgage rates low.
Trump's administration estimates an IPO could raise roughly $30 billion, valuing the GSEs at over $500 billion, but analysts question the timeline for completion.
Bose George of KBW believes that achieving an IPO by year-end is unlikely due to necessary preparations and capital levels that need resolution.
Wells Fargo analysts suggest a 40% chance of the IPO happening soon due to ongoing fundamental challenges and elevated execution risks.
The priority for the mortgage industry is that the new entity retains some government guarantees, which help stabilize the mortgage market and keep rates down.
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