Treasury Department Making Sure Fannie, Freddie Can’t Live Without It

They're in a co-dependent relationship.
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If Jack Lew can’t have them, no one can. Especially not these people.

The government sweeps nearly all of Fannie’s and Freddie’s profits to the Treasury Department each quarter and allows them to carry only a tiny amount of capital, meaning a loss could result in the need for more taxpayer funds. The government’s rules let the companies maintain capital buffers of $1.2 billion apiece. Next year, they will be reduced to $600 million. In 2018, they will be zero.

The chief executives of Fannie and Freddie, as well as the companies’ regulator, the Federal Housing Finance Agency, have said the combination of low reserves and volatile earnings boosts the chances taxpayers will have to come to the mortgage companies’ aid again.

Will Fannie and Freddie Need Another Bailout? [WSJ]

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