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The improving housing market is expected to allow Fannie and Freddie to begin paying back their...

The improving housing market is expected to allow Fannie and Freddie to begin paying back their taxpayer bailout faster than expected, according to a new FHFA report. The baseline forecast now sees the two agencies as just owing $76B by 2014's end, against $124B estimated this time a year ago. Getting down to $0? It's probably never going to happen.
Comments (1)
  • Joe Eifrid
    , contributor
    Comments (336) | Send Message
     
    "Getting down to $0? It's probably never going to happen."

     

    Want to make a bet about that? They will probably also be able to reduce loss reserves, and the companies have the following deferred tax assets as of December 31, 2011: Freddie $ 46 billion; Fannie $ 64 billion. Now that they are profitable they will have taxable income to start using those. Keep in mind that a chunk of what they borrowed from the government was not really needed but they were forced to take as the Treasury demanded that their liabilities equaled their assets (technically solvent) although they had sufficient cash flow to meet obligations throughout most of the mess.

     

    The Fannie and Freddie preferreds and common are looking more and more interesting.
    26 Oct 2012, 04:20 PM Reply Like
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