Fannie Mae profits push taxpayers into black on housing bailout

Comments (10)
jdl51 wrote:

So the bailouts that the republicans have been criticizing for five years now were a rousing success, saving the banking industry, auto industry and Fannie and Freddie, without costing the govt/American taxpayers a dime. If they hadn’t been done, we would have been plunged into Great Depression II.

Feb 21, 2014 9:37am EST  --  Report as abuse
Harry079 wrote:


You need to ask yourself where did all that income come from that allowed Fannie and Freddie to make those payments back to the Treasury?

Might it be the $40 billion a month of Mortgage Backed Securities the Federal Reserve has been purchasing?

Also why isn’t that money being returned to the Federal Reserve to reduce it’s $4 trillion balance sheet?

Feb 21, 2014 11:22am EST  --  Report as abuse
Harry079 wrote:

As of Feb. 1, 2006, when Bernanke took over as chairman, the Fed’s balance sheet indicated it owned $748,840,000,000 in U.S. Treasury securities. At that time, the balance sheet listed no mortgage-backed securities. As of Jan. 29, 2013, the balance sheet indicated the Fed owned $2,243,176,000,000 in U.S. Treasury securities and $1,532,224,000,000 in mortgage-backed securities.

See more at:

Feb 21, 2014 11:28am EST  --  Report as abuse
Harry079 wrote:

You might also be interested to know that prior to 2006 government backed mortgage entities owned less than 10% of all mortgages.

Today they own nearly 90% of all mortgages.

Feb 21, 2014 11:32am EST  --  Report as abuse
Whatsgoingon wrote:

“We expect to remain profitable for the foreseeable future,” Fannie Mae President and Chief Executive Officer Timothy Mayopoulos said on a call with reporters. “Our annual earnings will remain strong and healthy … nonetheless we also expect they will be substantially lower than in 2013.”

How far out is “foreseeable future?” At the same time we get break-even on the bailout, we added $4T in debt. We can we break even on that?

Feb 21, 2014 12:04pm EST  --  Report as abuse
COindependent wrote:

@Harry Agreed. The government has only served to distort the housing market. Another area where constitutionally, the government should be involved. And your numbers are spot on–another part of the economic charade promoted by the Fed in this century.

If we go back prior to WW2, most mortgages were written and financed locally. FNMA and FMAC are part of the Lyndon Johnson social engineering agenda and should be abolished. There are sufficient laws on the books to protect qualified buyers from being red-lined by banks and we should move to that model again–including breaking up the massive interstate banks.

The bigger question will revolve around how the Fed intends to unwind these bonds without putting the economy on its knees.

Feb 21, 2014 12:24pm EST  --  Report as abuse
COindependent wrote:

Error on my part. Government should NOT be involved in the housing markets.

Feb 21, 2014 12:50pm EST  --  Report as abuse
Harry079 wrote:

From FORBES 8/12/2013

“We see repeated use of creative accounting by government in its daily activities, from how it defines inflation, medical care cost, budget cuts and budget deficits to name just a few of the more prominent ones.

The Fannie and Freddie accounting for “profits” and its reporting as a reduction of the deficit and national debt represents a truly creative accounting technique. We see the Federal Reserve Bank creating money out of thin air, using it to buy newly revalued mortgages from Fannie and Freddie who then use the sales proceeds to pay back loans and a dividend to the Treasury, who declares this a deficit and debt reduction.”

Feb 21, 2014 3:35pm EST  --  Report as abuse
Laster wrote:

After reading this story I can now truly say I wish the market would have collapsed.

So they spend the last five or six years papering over this financial trash heap, now they want to lie to us about what really transpired.

Feb 21, 2014 9:11pm EST  --  Report as abuse
Yellowsub123 wrote:

Unfortunately people only see face value of an article and fail to link what’s going on overall, like the stock market is doing great too for the same reasons Fannie has created “profits”.

No different than TARP and how people think the banks actually repaid from normal business operations.

It all leads back to the FEDs…

Feb 23, 2014 11:11am EST  --  Report as abuse
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