More on Freddie and Fannie

If you haven’t seen  NLIHC Memo to Members you might be interested in the following analysis of the impact of the bailout on the National trust fund on the bailout:

“First, the contributions that Fannie and Freddie are to make to fund the National Housing Trust Fund are based on their volume of new business,not profits. Their share of the mortgage business is going up and will continue to do so. However, the second thing to know is that these contributions can be suspended by the regulator if he or she considers them to be detrimental to the financial health of the GSEs. Third, on the other hand, because of the diversion of the funding for the National Housing Trust Fund to backstop the new foreclosure prevention program,the National Housing Trust Fund will not receive any funding until FY10 at the earliest. Hopefully, the actions taken now will restore confidence in the GSEs, so that contributions to the National Housing Trust Fund will be possible by then.”

Today, The NY Times weighs in with

As Crisis Grew, One Option Remained
Published: September 8, 2008
The downfall of Fannie and Freddie stems from a series of miscalculations and deferred decisions. Cut/paste below

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