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Fannie Mae and Freddie Mac have been under conservatorship for almost eight years following a massive taxpayer-funded bailout. While many in the industry have called for a GSE reform on numerous occasions over the years, the future of the conservatorship remains uncertain.
Melvin Watt said in a speech that since the GSEs were put into conservatorship, there is a quote safer and more stable housing finance system end quote. In his speech he noted that guarantee fees have increased by two and a half times since 2009 to an appropriate level, stronger credit standards have removed unsound risk layering, and the FHFA is focused on how to support sustainable access to credit for homeowners.
The FHFA’s conservatorship of Fannie Mae and Freddie Mac remains a controversial topic and the ability of the GSEs to remain profitable has been questioned by lawmakers and other stakeholders. But on Thursday, Freddie Mac answered the question—at least for now—by reporting a net income of 6 point 4 billion dollars for the full-year 2015 in the Enterprise’s Q4 and full-year 2015 Earnings Report.
