Freddie Mac continued to make a profit in the first three months of 2017 but its net income slipped to $2.2 billion, a 54.2 percent sequential decline from the previous quarter, according to the government-sponsored enterprise’s earnings statement published this week. The GSE attributed the decline to a reduction in market-related gains with interest rates and spreads remaining steady. There were fewer refinance transactions, and non-cash hedging gains disappeared during the quarter. Freddie’s core business of collecting guarantee fees continued...
Perhaps the new Treasury secretary finally looked at the numbers, realizing that Fannie and Freddie – wards of the government since September 2008 – forked over roughly $20 billion to Uncle Sam…
Since the fall of 2008, Treasury has controlled the senior preferred stock in Freddie and Fannie, making the U.S. government the de facto owner of the two - and the linchpin to the housing and mortgage markets.
With Fannie Mae and Freddie Mac set to lose their capital buffers in eight short months, industry trade groups, think tanks and policy wonks are churning out reform blueprints at warp speed these days even though Congress likely won’t act until sometime next year, if then. Last week, the Mortgage Bankers Association floated its plan to reconstitute the two government-sponsored enterprises – followed by several critiques, not all of them kind – and this week the Independent Community Bankers of America published its proposal. Both plans throw...
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