Fannie and Freddie remain troubled wards of the state, with no blueprints for the future and no clear exit strategy for the government. Nearly a year and a half after the outbreak of the global economic crisis, many of the problems that contributed to it haven't yet been tamed. On Dec. 24, Treasury said there would be no limit to the taxpayer money it was willing to deploy over the next three years to keep the two companies afloat, doing away with the previous limit of $200 billion per company. As mortgage delinquencies rise, Fannie and Freddie are required to set aside more capital to cover anticipated losses. Each quarter, if their revenues are insufficient to meet those financial needs, the Treasury has to kick in more money.
Fannie's CEO Mr. Haldeman stated recently that they were "fortunate" to have such a clear mission—the government's foreclosure-prevention drive. "We're doing what's best for the country," he told them. "We're making decisions on [loan modifications] and other issues, without being guided solely by profitability.
Together with the Federal Housing Administration, they fund 9 out 10 American mortgages.
