Posted by WARREN MOSLER on May 9th, 2012
FNMA may have always had only a market to market issue and not a long term cash flow issue.
And its always been a public/private partnership with govt’s role that of the funding model, so I never saw govt funding as a ‘bailout’
The public purpose of FNMA is to get lower income earners in their own homes, which it has successfully done for maybe 50 years for millions of American owners and their families.
The ‘real’ cost of the program is the alternative use of the actual goods and services devoted to this mission.
(Just me, but seems like it’s been a net gain.)
Note that banking is a public private partnership as well, with govt providing the funding, directly or indirectly, and private capital pricing the risk. So for me, govt provided liquidity for banking isn’t a ‘bailout’ but a necessary and continuous condition, all presumably serving public purpose.
By Clea Benson
May 9 (Bloomberg) — Fannie Mae, the biggest backer of U.S. home loans, said it won’t seek Treasury Department aid after reporting net income of $2.7 billion for the first quarter.
The Washington-based company, which has operated under U.S. conservatorship since it was seized in September 2008, cited lower credit-related expenses, a decline in serious delinquency rates and a drop in its inventory of owned properties as contributors to the improvement, according to a statement released today. The company has drawn a total of $117.1 billion in aid while under government control.
The first-quarter profit reflected a “less significant decline in home prices,” the company said in a Securities and Exchange Commission filing.