Fannie Mae-No Politics (FNMA)

[Dallas66]

This comes from the Congressional Research Service - August 13, 2013

this part is towards the bottom of the report


What Was Fannie Mae’s and Freddie Mac’s Financial Position?

In placing the GSEs under conservatorship, their new regulator, FHFA, said that they needed assistance to survive. FHFA reported that changes in the economy and the GSEs’ slow recovery from their earlier accounting and financial problems reduced their financial strength.

The Office of Federal Housing Enterprise Oversight (OFHEO), which had been Fannie Mae’s and Freddie Mac’s safety and soundness regulator before July 30, 2008, repeatedly said that the GSEs had adequate capital. In other words, according to OFHEO, the GSEs had sufficient funds to survive their financial difficulties.

Because details of the GSEs’ portfolios and guarantees include confidential and proprietary information, it is difficult to reconcile the two different assessments of the GSEs’ financial position. In broad terms, the GSEs purchased slightly more than $169 billion of private label subprime MBSs in 2006 and 2007; they purchased slightly less than $58 billion of Alt-A MBSs in the same time period, out of combined total mortgage purchases of $1.677 trillion.57 At the end of 2007, the subprime and Alt-A MBSs represented 13.5% of the GSEs’ total assets.


Link:

http://www.fas.org/sgp/crs/misc/R42760.pdf