Menu

Taxpayers Might Need to Bail Out Fannie Mae and Freddie Mac Again

Accounting Today, By Michael Cohn

William Isaac, who chaired the FDIC from 1981 to 1985 during the Reagan administration, wrote an op-ed last week for The Wall Street Journal pointing to a warning from the Inspector General of the Federal Housing Finance Agency that Fannie and Freddie could require more government bailouts if the housing markets decline. Fannie Mae CEO Tim Mayopoulos sounded a similar warning during a recent earnings call.

The problem stems from a decision by the Treasury Department in 2012 to include Fannie and Freddie’s earnings within general revenues for the government rather than allowing the two government-sponsored enterprises to build a capital reserve.

Read the full article: Taxpayers Might Need to Bail Out Fannie Mae and Freddie Mac Again