U.S. Foresaw Better Return in Seizing Fannie and Freddie Profits

U.S. Foresaw Better Return in Seizing Fannie and Freddie Profits
1 option was changing the terms of the bailout to “replace the current 10 percent fixed dividend with a permanent ‘net worth sweep.’” The memo noted
that Freddie Mac was “expected to be net income positive by the end of 2012 and Fannie by the end of 2013.”
Another unsealed document, a draft memorandum circulated before the profit sweep, shows
that federal officials recognized it would generate more money than the original bailout terms.
The materials also show that government officials involved in the decision to divert the profits knew the change would most likely generate more money for
Treasury than the original rescue terms, which required the companies to pay taxpayers 10 percent annually on the bailout assistance they had received.
Documents recently unsealed in a lawsuit against the federal government by Fannie Mae
and Freddie Mac shareholders shed light on a crucial 2012 policy change by the Treasury Department.
But newly unsealed documents show that as early as December 2011, high-level Treasury officials knew
that Fannie and Freddie would soon become profitable again.