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Freddie/Fannie Tarp money - Repaid?


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#1 concert andy

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Posted 08 November 2013 - 09:40 PM

Sounds like they are finally going to be repaying this money down.

 

 http://projects.prop...rg/bailout/list

 

This links shows they still owe $40 Billion.

 

Freddie  =   -$10,925,000,000

Fannie  =   -$30,384,000,000

 

 

What made me research this is I saw the following very short story...

 

Fannie Mae, Freddie Mac Repaying Bailout

 

Government-run Fannie Mae and Freddie Mac, America's biggest providers of housing finance, will send $39.0 billion to the U.S. Treasury in December, leaving them within a hair of covering the cost of their 2008 bailout.

Freddie Mac said on Thursday it will pay $30.4 billion in dividends after a multibillion-dollar tax-related windfall fueled a record profit in the third quarter.

 

 

 

Then I found this story with more details.

 

Fannie Mae, Freddie Mac bailouts almost repaid

Federal taxpayers have nearly recouped their $188 billion investment in Fannie Mae and Freddie Mac, the mortgage finance giants taken over by the government in 2008.

 

Third-quarter profit rose sharply at both companies, each reported Thursday, letting Freddie Mac finish reimbursing taxpayers for its bailout and bringing Fannie within about $2 billion of repaying what it received.
 
Their recovery owes much to an improving housing market, legal settlements and tax benefits.
 
Fannie said net income more than quadrupled compared with last year's third quarter, reaching $8.7 billion. Freddie said it earned $30.5 billion, as a $6.5 billion operating profit was combined with a $24 billion tax benefit.
 
Freddie said the gain represented a decision that it will be profitable enough over time to eventually use all of the massive tax benefits it built up while losing tens of billions of dollars during the financial crisis.
 
Freddie said it will finish reimbursing the government for its $71.3 billion bailout by year's end, including a $30 billion payment it will make by December. In fact, the total of its payments will exceed the amount it received from the Treasury by $9 million. Fannie said it will pay $8.6 billion in December, leaving it about $2 billion short of the $116.1 billion it received from the government.
 
The milestone in the USA's recovery from the 2008 financial crisis comes as a rising housing market has put Fannie and Freddie, which are still in federally supervised conservatorships, back on their feet. Fannie and Freddie together buy or guarantee most U.S. mortgages, and by taking them over, the government has expanded its role in housing since the crisis.
 
Ideas for how to eventually replace them with a system that relies more heavily on private capital are still at an early stage. Fannie's and Freddie's agreements with the Treasury call for them to gradually shrink their operations.
 
For now, the two entities will keep operating under 2012 agreements with the Treasury Department that require them to pay much of their profits as dividends to the government. That means taxpayers will begin reaping multibillion-dollar returns on the investment by next year, barring a reversal of the housing recovery. The requirements will be reduced gradually until 2018, reflecting the Obama administration's intention to phase out Fannie and Freddie's role in the market.
 
Already, payments from the two government-sponsored enterprises reduced the 2013 federal deficit by more than $140 billion.
 
"It's going to challenge the convictions of policymakers about reforming Fannie and Freddie,'' said Tim Rood, a former Fannie executive who is a partner at a Washington-based consulting firm that helps businesses work with the mortgage entities and the government. "You can have all the principles in the world, but with legislators flipping couch cushions looking for change, it's hard to shoot the two-headed monster that's spitting out $10 bills."

 



#2 georgesmith

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Posted 03 December 2013 - 05:59 AM

When a number of large corporations went to the government for a bailout during the recession a few years ago, one of the first things the American people wanted curbed was executive compensation. A business that unsuccessful miserably and wanted TARP help shouldn't be lining already padded pockets. However, a brand new report has found executive compensation slightly dipped even while a number of firms, such as General Motors, AIG and Ally Financial, were receiving TARP funding. The use of the repayment of housing loans as the basis of these securities in many cases of the lending for housing during the boom was based on asset-backed securities. Therefore, when the housing prices fell, the mortgage defaults increased. The securities used fell in value causing capital losses for firms holding them. If you do not get a pay raise this year, you can pay for extra things with an installment loan.



#3 concert andy

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Posted 03 December 2013 - 03:25 PM

When a number of large corporations went to the government for a bailout during the recession a few years ago, one of the first things the American people wanted curbed was executive compensation. A business that unsuccessful miserably and wanted TARP help shouldn't be lining already padded pockets. However, a brand new report has found executive compensation slightly dipped even while a number of firms, such as General Motors, AIG and Ally Financial, were receiving TARP funding. The use of the repayment of housing loans as the basis of these securities in many cases of the lending for housing during the boom was based on asset-backed securities. Therefore, when the housing prices fell, the mortgage defaults increased. The securities used fell in value causing capital losses for firms holding them. If you do not get a pay raise this year, you can pay for extra things with an installment loan.

 

 

Not all institutions went to the government for funding, some companies were so big the government forced them to take TARP money.



#4 TakeAStepBack

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Posted 03 December 2013 - 03:59 PM

Not all institutions went to the government for funding, some companies were so big the government forced them to take TARP money.

 

True story. :jimy: