The Treasury Department last week altered its financial support of Fannie Mae and Freddie Mac. The revised terms are that the guarantees of how much the Feds will back them are going down, but officials say the amounts they are still guaranteeing will be plenty. More importantly, there will now be no dividend that Fannie Mae and Freddie Mac has to pay. The new terms are that whenever there are profits they will simply be swept over to the Feds; and losses will still be covered by we the people.
Prior to this change, since there have been no profits for the most part in the last four years since this takeover of Fannie and Freddie began, Fannie and Freddie have had to borrow money from the Treasury (i.e. we taxpayers) to make their dividend payment. Now the requirement Read the rest of this entry »