If Fannie kept the money it would have made interest on the DTA and since they turned the DTA into cash, there is no reason to believe if they had kept it and simply used the interest they earned on that money, they could have used the 2013 79 billion for many quarters to pay the 2.9 billion dividend per quarter.
79 billion at 5% a year could have paid the interest for almost 2 of the 4 quarters.
this could have went on for years, UNTIL fannie could just get a new loan and pay treasury off. maybe a 3% loan, at current rates that it loans money just 2 years later.
Now if Fannie was allowed to get a new loan at 2015 rates of 3% then Fannie would have paid back treasury instead of 10% punitive 2008 LOAN.
USA government is forbidden from making investments into private corporations to produce a profit! Im sure we all know this as true. Name one instance where the government makes investments in order to make a profit? Outside of TARP of course!
Im sure a lawyer could win that argument. Is the Treasury investing in APPLE trying to make a profit. Maybe giving them all the tech for i phones? No they are not.
2008 10% loan = punitive
2015 10% loan = Loan sharking
Fannie and Freddie should not be paying 10% when both have AAA credit ratings!
They could borrow the $187 in the free market at 3% im sure, they do everyday!
Its their business. I think i read fannie added $250 billion of liquidity this quarter.
Im sure they could get a better loan. Hell I would get in line for 5% quartered and Im a nobody with a savings account paying 0.25%.
Fannie cant get new loan because FHFA conservator wont allow them to.
If the government wants to run mortgages this bad, whats the chances of getting rid of fannie and allowing Bank of america to run mortgages?
Bank america going to allow 3% down? under 700 fico score? Please! No way.
Jp morgan going to allow 30 year fixed at today rates, on its books for 30 years?
Give it to the banks and watch how fast mortgages come to a stop and how NO ONE can buy a house, everyone rents. I wonder what the economy will think of this future? Without real estate, the USA economy will come to a complete HALT and FAIL.
Look at 2008 for the Truth! That is what happens when real estate market STOPS.
Housing price would fall without the 30 year mortgage. WHY?
Because Jobs dont pay enough to allow for 10 year and 5 year mortgages monthly payments, let alone balloon payments at the end of 5 years. What if im unemployed like in 2008 when my 5 year balloon hits and NO ONE will refinance me? Foreclosure.
What do Foreclosures do? Decrease values of housing in every neighborhood they exist in. This is all a lie and shame on the US for allowing this type of political wind bag talk about Americas only housing finance system it will ever have, this one we have right now, Fannie and Freddie are the american system and that is why they cant wind them down!! All a lie, pathetic.
7 years plus off of 2013 payments, im sure another 7 years off the 2014 payments, add interest and you would be in about 20 years worth of payments at $12 billion a year. Point is i am sure sometime between 2013 and 2033, Fannie could get a better rate than 10% and pay off the treasury with a new loan.
Look at Greece they do it every 2 years. Hell every company does it. Fannie could just issue bonds at 5% and only pay 6 billion a year in interest fixed with a AAA rating! this would equate to 1.5 billion a quarter from here to forever.
Lets not forget, Fannie paid just now 1.9 billion to Treasury, but I suspect there is some finagling going on with the books, Derivative Losses that will be reversed as rates rise. Smallest payment since 2009.
- PVCT shareholder blog
- GILD shareholders blog
- FANNIE FREDDIE GOOGLE GROUP
- Bill Maloni GSE
- FNMA - YAHOO message board
- FNMA Real Time QUOTE
- $60 per share, target
- Throwing out the case: Perry Injunction
- Why the FHFA took over Fannie and Freddie and AIG
- homesteading off grid planning
- Save on Your Electric Bill