Fannie Freddie Rake in Record Profits: But will Money Train Last Forever?

[Corey Dutton]

Fannie Mae and Freddie Mac own or guarantee approximately 60% of all of the mortgages in the U.S.A. According to a recent article in MPAMag.com, Fannie and Freddie are pulling in record profits. But the head of the Federal Housing Finance Agency, Mel Watt, warns that the “money train won’t last forever.”

“The record level of profits that Fannie and Freddie have had over the last couple of years certainly are not sustainable, because they result in large part from large settlements of litigation,” Watt said.

Congress is working on passing new law that that would replace Fannie and Freddie with private investor capital. Many mortgage industry experts oppose this measure, as they believe will be detrimental to housing finance as a whole.

(Source: MPAMag.com: http://www.mpamag.com/mortgage/watt-private-sector-unready-to-replace-fannie-and-freddie-18271.aspx )

Posted by Corey Curwick Dutton