Fannie Mae might be able to refund all the bailout money it received from the U.S. Treasury, according to the company’s CEO, but he still wants Congress to chart a course for the future of the housing finance system.
“Given the strength of our future profitability—it is possible that we will be able to pay dividends equal to or greater than we received from the Treasury Department,” Fannie president and chief executive Timothy Mayopoulos told Bloomberg TV.
Fannie received $161 billion from the U.S. Treasury since it was placed in conservatorship in September 2008 and it has already paid $35 billion in dividends to Treasury.
Fannie Mae had a turnaround year in 2012 and reported a
“I do think the taxpayers may well receive their
While Fannie is paying substantial dividends, “it is really important to bring private capital back into this market,” the Fannie CEO said.
He stressed that Fannie Mae, Freddie Mac and Ginnie Mae are playing an “outsized role” in the mortgage market. And private capital won’t comeback until policymakers provide “clarity about what the future of the housing finance system is going to be,” he said.
He noted that Fannie and Freddie are working on a couple of things to see if private capital can be coached back into this market.
That includes raising loan guarantee fees and experimenting with risk-sharing arrangements so private investors take on some of the credit risk in mortgage securitization transactions.
“Our return to profitability allows policymakers to think about a full range of potential outcomes,” the Fannie CEO said. “They don’t have to start with the assumption that creating some successor to Fannie and Freddie necessarily means they have to accept hundreds of billions of dollars of losses to the taxpayers.”
And the sooner policymakers provide clarity about the future of the housing finance system, he said, “the sooner private capital will likely come back into this market.”
