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FNMA Nears Break Even With US

The Housing Hour September 16, 2013

Five years ago things looked really bad. All phases of the financial markets were collapsing. The Federal government stepped in, with TARP (Trouble Asset Relief Program), and bailed out Banks, FNMA, FreddieMac, AIG, Autos and more, close to 700 billion dollars were spent to keep things propped up.

Good News!

Today, the government has recovered 670 billion of the TARP money and expects profits very soon. You heard correctly, TARP will be a Federal money marker in the near term.

FNMA Nears Break Even With US.

The GSE’s (FNMA/FreddieMac) required 187 billion dollars from TARP funds, however, today they re-paid 146 billion to the Feds. That’s 78% of the borrowed funds paid back in 5 years. Plus Fannie and Freddie are making significant profits and expect to pay an additional 25 billion payment by year end. Also, since all future profits go the government, Fannie/Freddie will be money makers for the government sometime in 2014.

More Good News!

The housing sector is not the only thing turning a profit. Bank profits have allowed them to pay back 109% of their Tarp money, meaning that the government made 22 billion on Bank stock sales. The AIG bailout has produced a 22 billion dollar profit too. Autos have re-paid 66%, and everything else has re-paid 83%.

Was TARP a good idea?

We’ll let historians debate that question, but everyone would have to agree, recovery of 670 billion in less than 6 years is pretty amazing.

Read our multi-part Series: The Liquidity Factor

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