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Fannie And Freddie: Deficit Reduction Tool Or Mortgage Market Future?

Seeking Alpha, By David Sims

Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) aren’t going anywhere, but according to a recent survey from the Collingwood Group, mortgage reform is not a priority for the Obama Administration. 94% of survey respondents seem to think that the administration will continue to use the companies for deficit reduction despite the fact they are now the most highly leveraged financial institutions in the world.

In the most recent quarter, Fannie Mae and Freddie Mac earned about $1.5 billion, but they will send the U.S. Treasury about $2.8 billion for general government spending. This further reduces their available capital levels. The majority of survey respondents said that they thought there were significant risks in doing nothing on mortgage reform.

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