Fannie Mae-No Politics (FNMA)

[Patswil]

If you think reform of the mortgage system which includes ridding the world of Fannie (FNMA) and Freddie (FMCC) is likely you might want to consider this.
Fannie Mae said it will make a $10.2 billion dividend payment in September to the U.S. Treasury for its rescue aid. After that payment, which comes on the heels of nearly $60 billion Fannie sent to the government last quarter, it will have paid about $105 billion in dividends to the Treasury, roughly 90 percent of the $117.1 billion it received in taxpayer assistance.
Meanwhile, Freddie Mac, which on Wednesday reported its second-largest profit ever, $5 billion, will be sending Treasury a $4.4 billion check next month. That will bring its running total to about $41 billion, or close to 60 percent of the $71 billion in bailout funds provided to Freddie.
Under the terms of the bailout agreement, both mortgage companies are only allowed to hold $3 billion in net worth and all profit in excess of that goes back to taxpayers.
Moreover, none of the dividend payments goes toward repaying the $188 billion in rescue funds, which were provided by the government and gave it a controlling stake in the form of preferred shares. Neither company has the option of buying back the stakes, which is one of the big questions regarding their future.
That’s one hell of a big cash cow to legislate out of existence, particularly when you’re scraping around for revenue.