Fannie Mae-No Politics (FNMA)

[navycmdr]

Fannie, Freddie poised to pause Treasury sweeps soon - WSJ



Sep. 23, 2019 8:39 AM ET - By: Liz Kiesche, SA News Editor

• Fannie Mae & Freddie Mac are expected to start keeping their earnings as early as this week,
putting on hold the arrangement in which the two mortgage-finance giants handed over most
of their profits to the Treasury Department since the government put them in conservatorship
during the financial crisis, writes the Wall Street Journal.

• That will be the first step in allowing the companies to build up their capital to prepare
them to become private companies once again.

• Under the agreement, Fannie and Freddie would be allowed to keep about a year's
worth of profits, or ~$20B, Federal Housing Agency Finance chief, Mark Calabria
told the WSJ in an interview.

• Each of the companies is now allowed to hold only $3B in capital.

• "We're in the middle of negotiations with Treasury, but I think we're close," Calabria said.
"I hope to have it done by the end of the month."

• He also said that taxpayers would get additional shares in Freddie and Fannie --

equivalent to new stakes in a firm preparing to launch an initial public offering --

in exchange for allowing the companies to retain earnings now.

• The two companies have paid a total of ~$300B in dividends to the U.S. Treasury,
after having taken $190B from taxpayers in the years after the financial crisis.

• KBW analyst Bose George writes that it's still unlikely Fannie and Freddie

will be recapitalized during the current Trump presidency.

https://seekingalpha.com/news/3501079-fannie-freddie-poised-pause-treasury-sweeps-soon-wsj