Fannie and Freddie to pay out all profits
Source: Financial Times
Fannie Mae and Freddie Mac will pay all of their earnings to the taxpayer as part of a package of measures to wind down the troubled mortgage finance agencies more rapidly.
The US Treasury said that it was changing its deal with the agencies so they would transfer their full profits whatever they might be rather than paying a fixed 10 per cent dividend on government-owned preference shares.
The changes will prevent Fannie and Freddie from rebuilding their capital base and hence taking a larger role in the mortgage market. They also eliminate a perverse situation whereby the two agencies sometimes had to borrow more money from the Treasury to pay the preference dividend back to it.
Read more: http://liveweb.archive.org/http://www.ft.com/cms/s/0/a9f295ce-e883-11e1-8397-00144feab49a.html
LiberalEsto
(22,845 posts)but I very much doubt it.
He worked for Fannie for nearly 18 years and took a buyout.
Before he left, when they knew the stock was about to tank, the executives sent out a notice ordering company workers NOT to sell their stock.
Meanwhile, the execs dumped theirs, the stock tanked, and the workers at Fannie lost huge amounts of money on their own stock. One guy my husband worked with lost $2 million in stock, which was all his retirement savings. Fannie used to give people shares as bonuses, etc. My husband was luckier by comparison - he "only" lost $45,000 in retirement money. But that's still a LOT of money to us. I hope those Fannie officials fry in hell.
Hestia
(3,818 posts)Norton wouldn't let me on the site, which is known as having a virus. Heads up.
On the Road
(20,783 posts)Now, there were certainly problems with how the secondary market functioned over the last decade. But this would seem to pull out the rug out from any recovery in home ownership and housing prices.