TARP Is Mostly Dead and Fannie Mae Is Alive
Fannie Mae, the government-funded mortgage lender, had some surprising news earlier today. During 2012, for the first time in four years, it didn't require any funding from the Treasury Department. And, better yet, it contributed $7.6 billion back into the government's pocketbook. Which inspired us to check in on the government's other semi-willing recession-era investments.
The news about Fannie Mae is undeniably good. The Times' Dealbook blog explains the significance:
The huge profits rolling in at Fannie, and at its corporate sibling Freddie Mac, reflect the enormous role the government is playing in the housing market nearly five years after the crisis. As a result, the earnings will intensify the debate over the role that government should play in supporting housing. …
Fannie and Freddie charge fees in return for a guarantee that they will pay back mortgages that default. In the first years after the crisis, that fee revenue was overwhelmed by losses. As those have abated, profits have returned for the two mortgage giants.