Will Freddie Be the ‘Surviving’ GSE?

It’s probably no surprise that Freddie Mac made money in the first quarter while Fannie Mae continued to bleed red ink out of its financial oil pan. Consider this: Fannie reported a 72% spike in loan repurchase requests in the first quarter, a sign that its legacy portfolio (read: all those crappy loans it bought from Countrywide) is continuing to deteriorate in quality. Meanwhile, over at Freddie, loan repurchase requests have been declining for three consecutive quarters. Anyone who has worked in mortgages for more than 10 years knows that when it comes to credit quality Freddie has always been the more conservative of the two GSEs. Of course, it too got plenty drunk at the subprime bash of the century, just not as drunk as Fannie who also was sleeping with the biggest subprime prostitute of them all. (That would be Countrywide.) And with Freddie returning to some semblance of financial health (if it only it weren’t for all those pesky dividend payments to Treasury) it’s safe to ask this question: Will Freddie Mac wind up being the surviving housing GSE, that is, if Congress allows for such a thing to happen?