Fannie and Freddie Allowed to Make Money Again


Posted To: MND NewsWire

On Monday the government slightly loosened the leash on which it has held the two government sponsored enterprises (GSEs) for more than 11 years . In a letter signed by Treasury Secretary Steven Mnuchin and Federal Housing Finance Agency (FHFA) Director Mark Calabria, Fannie Mae and Freddie Mac will be allowed to retain a larger share of their profits to protect against any future financial downturns. The two corporations, which continue to provide most of the mortgage market for the U.S., were placed in government conservatorship in August 2008 at the start of the Great Recession. At that time, under the terms of a Senior Preferred Stock Purchase Agreement (SPPA), they were permitted to borrow up to $100 billion (later increased to $200 billion) in order to withstand potentially billions of…(read more)

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