MHProNews has learned from NationalMortgageNews the Federal Housing Finance Agency (FHFA) now estimates it will cost $52 billion less to bail out Fannie Mae and Freddie Mac because of better than expected results of the GSEs (government sponsored enterprises). The agency’s original estimate was between $221 billion to $330 billion, but now says the best case scenario will be $220 billion. It also notes this is an economic model. FHFA has already spent $169 billion of taxpayer funds to keep the capital end of the GSEs in the black, which insures that investors will continue to buy their bonds. Meanwhile, a new FHFA study shows Fannie and Freddie pay Treasury a mandated ten percent dividend, which is returned to the GSE’s in a quarterly draw. Most analysts say this will prevent the pair from ever becoming profitable again.
(Graphic credit: FHFA)