This chart shows that the total value of all cash dividends paid to Treasury under the Net Worth Sweep ($245.9 billion) plus the net worth increases to Treasury’s liquidation preference made in lieu of cash dividends ($78.3 billion) is equal to $324.2 billion. That is the current total, using data available through the first quarter of 2022, of the value transferred to Treasury under the Net Worth Sweep regime – thus far. Had there been no Net Worth Sweep, and had the GSEs instead paid the 10% dividend at the 2012 level of $18.9 billion per year over the last nine years and a quarter (FAC ¶64), their total payments to Treasury would have been $174.8 billion (9.25 × $18.9 billion). Accordingly, one approximation of the excess value transferred thus far to Treasury as a result of the Net Worth Sweep is $149.4 billion ($324.2 billion received under the Sweep minus $174.8 billion of 10% dividends payable absent the Sweep).
But this $149.4 billion estimate actually understates what Treasury has taken through the Net Worth Sweep, for two reasons. First, the Net Worth Sweep remains in effect, such that each quarter’s increase in net worth at GSE results in an increase in the Treasury’s liquidation preference in its senior preferred stock. Second, had it not been for the Net Worth Sweep, the GSEs would have been able to fully repay the amounts borrowed from Treasury, with interest, eliminating the need to pay any ongoing senior preferred dividend.
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