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Is Freddie Mac Facing another Draw?

In
2013 Fannie Mae and Freddie Mac (the GSEs) both essentially bankrupt five years
earlier, posted huge profits.  For Fannie
Mae it was $84 billion and Freddie Mac $49 billion.  Both of course disclosed that much of the profit
was the result of reclaiming tax assets written down during the crisis that led
to their being put in government receivership in 2008.  Those one-time adjustments reaped $45 billion
for Fannie Mae and $23 billion for Freddie Mac.  

Still
it was a spectacular year for the GSEs, and in an brief written for the Urban
Institute, Jim Parrott, a senior fellow at the Institute and owner of Falling Creek Advisors says talk around
Washington “began to shift from winding them down to releasing them from
conservatorship, taking much of the wind out of the sails of the already
flagging push for overhauling the housing finance system.  All reform involves risk, after all,” Parrott
said, “and these numbers suggested that we
were risking an increasingly healthy system.”

 

…(read more)

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