Will Obama and the GOP Sell Fannie and Freddie?

Let me see if I can state this bluntly: Fannie Mae and Freddie Mac are printing money. In other words, both are now squarely in the black when it comes to earnings – and that’s when you deduct for the hefty dividends the two must pay the U.S. Treasury Department. So, let’s ask a basic question: how long will they stay this profitable? Answer: as long as their cost of funds (courtesy of Uncle Sam) stays at next to nothing, and the yield on their interest earning assets remains  healthy. The way things stand today, both should continue to make LOTS of money. Of course, both have benefitted from taxpayer bailouts. And unbeknownst to the general public, both have huge reserves which one day might be recaptured. (The key word here is recaptured.) Over the past four years both GSEs have made their seller/servicers (Bank of America, Wells Fargo, JPMorgan Chase, and so on) pay dearly on loan buybacks while sticking it to the mortgage insurance industry. (In the mortgage industry, the shinola rolls downhill.) You might even say that Fannie and Freddie played a key role in the failure of three MIs. So, where do we stand with these two? Will Obama and the GOP work together to sell them to some Wall Street hedge fund? As well all know, the president and the Republicans have worked so well together in the past…