FHFA Explores Fannie Mae, Freddie Mac Receivership Plan

The issue remains politically complex: Fannie and Freddie were taken over by the government during the 2008 crisis and forced to pay a preferred dividend to the U.S. Treasury each quarter. But as their portfolios deteriorated, Fannie and Freddie began bleeding cash and now owe the government around $190 billion, sparking outrage from taxpayers and politicians alike. Yet despite their much-diminished financial positions, the two entities have become critical in propping up the housing market by buying and guaranteeing mortgages by private lenders.

A study by the Center for Data Analysis released in June concludes that the removal of Fannie and Freddie would have a minimal impact on home ownership levels, but they currently provide a linchpin in the mortgage market. A winddown of their enormous portfolios probably would take years.

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